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Hurricane Otis slammed into Mexico’s Pacific coast yesterday morning as a significant category 5 storm with sustained winds of 165 mph and has caused significant damage, but its rapid intensification was missed by all the major weather models, which RMS’ James Cosgrove calls a “monumental” miss.
Hurricane Otis is officially the strongest hurricane on record to make landfall on Mexico‘s Pacific coastline and also the first ever Category 5 major hurricane to make landfall from the Eastern North Pacific since records began, RMS Senior Modeler James Cosgrove explained.
As we were first to report yesterday, hurricane Otis is set to trigger a disaster insurance payout under the Mexican government’s IBRD / FONDEN 2020 catastrophe bond.
We also reported first that specialist ILS investment manager Plenum said that it anticipates the payout being 50% of the notional of the $125 million of Class D Fonden 2020 cat bond notes that are exposed to Pacific hurricanes.
RMS’ Cosgrove highlights an important point, in that hurricane Otis had not been anticipated to intensify at the rate seen and in fact none of the…