Kingsview CIO Scott Martin On Fox Weather Live – 9.19.24
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STEVE BENDER: Fox Weather Live, we’re just over a week removed from Hurricane Francine making landfall in Louisiana as a Category 2 hurricane, bringing dangerous storm surge and flooding to coastal communities before moving inland. It knocked out power to hundreds of thousands of people, and numerous water rescues were needed after people became trapped in their homes and cars. We’re already learning about the potential costs of this storm. A report by KC and Company finds that the privately insured losses from Francine will be around $1.5 billion. NOAA will complete its own analysis, but as of now, Francine is not officially considered a billion-dollar disaster. Either way, we know there’s going to be a hefty price tag. Let’s bring in market meteorologist and Fox Business contributor Scott Martin. Not only does he know money, but he’s also a weather enthusiast with the gear to prove it.
SCOTT MARTIN: Socks. My socks change with the weather outside too, Steve, so that’s kind of fitting.
STEVE BENDER: We’re going to have to activate tropical mode on those and let them flood your shoes.
SCOTT MARTIN: I might be stepping in some puddles here!
STEVE BENDER: Real quickly, because you’re the money guy, but you were telling us earlier that weather has been a passion of yours since you were four.
SCOTT MARTIN: As soon as I could walk and talk, man, weather was always inside me. I think a lot of people can relate. It was something I thought about all the time and just wanted to be a part of. So this is like a dream for me.
STEVE BENDER: Yeah, now you’ve merged two passions—business and weather. As captivating as weather can be, it can also be powerful, deadly, and costly. So, Scott, I want to ask you about the $1.5 billion estimate from Francine. I was a little surprised by that number. We had Category 2 wind gusts, but that was mostly off Eugene Island, and New Orleans got nine inches of rain. It didn’t seem like a massive community got wiped out like in past storms. So, when you look at it, did it seem like a $1.5 billion disaster?
SCOTT MARTIN: There are a couple of things going on. First, insurance is a big factor. I don’t want to say people are overstating it, but they certainly don’t understate damages these days because they need the relief. Second, with economic and population growth, storms tend to have bigger impacts now than they did a few years ago. Lastly, while some of the direct impacts seemed less severe, this was a widespread storm. I agree that the estimate seemed a little high, but given the oil market impacts, it wasn’t too terrible.
STEVE BENDER: Yeah, the oil markets were actually surprising. Coming into the event, we saw Hurricane Francine form quickly in the Western Gulf, and we started to look at the ripple effects for oil and natural gas production. Interestingly, crude oil prices were going down before landfall but started rising the day after. We saw almost half of the oil rigs get shut down. So, is there a long-term impact, or was the immediate impact minimal?
SCOTT MARTIN: The neat thing about the Gulf these days is that refiners are better prepared for storms like this. Cat 1 and 2 hurricanes don’t have as much of an impact as they used to. In the past, we had longer, more severe shutdowns. But oil prices have been fickle this year, with global production up and demand down. So, when a hurricane disrupts production, it doesn’t move the needle as much. However, a larger storm could still change things, especially if there’s significant damage to refineries.
STEVE BENDER: Interesting to see how it all unfolded. Like you said, it’s all about supply and demand. I want to shift focus to the coastal storm in the Carolinas this week. Carolina Beach was put under a state of emergency and got battered, but it wasn’t a named storm. From an insurance perspective, does that change anything?
SCOTT MARTIN: Yes, it does. Named storms typically involve more federal assistance, like FEMA, while private insurance is more common for unnamed storms. Named storms tend to put more pressure on FEMA, and we talked earlier this season about concerns over FEMA running out of money. Fortunately, we haven’t had as many named storms as expected, so the FEMA budget is still looking strong.
STEVE BENDER: Yeah, going into the season, we were predicting an off-the-charts hurricane season. FEMA’s latest report shows they still have about $7.9 billion in funds. But do you think that’s enough as we head into the spring severe season?
SCOTT MARTIN: It never feels like enough, especially when you consider how quickly things can change. It only takes one or two big storms to drain that budget. I’m happy we haven’t had those 20-some named storms, but if we do get a few big ones, that budget could be wiped out in no time.
STEVE BENDER: Absolutely. Well, Scott, it’s always a pleasure having you here. Thanks for joining us, and maybe I’ll have to visit Chicago next time!
SCOTT MARTIN: Anytime, Steve. Let’s do it!
