Hurricane Ian loss estimates creep up as RMS pegs $74bn top end
New estimate exceeds the previous highest figure from Karen Clark & Company of up to $63bn in losses, which would rank the storm second only to 2005’s Hurricane Katrina, which cost re/insurers $89bn in 2021 dollars
Catastrophe modelling firm expects losses to be between $53bn and $74bn – the highest estimate so far – with a quarter of the total cost to be caused by storm surge and flood
Insured losses from Hurricane Ian could be as high as $74bn, analysis from RMS said, in what is the highest loss estimate for the devastating storm so far.
The catastrophe modelling firm said it expected losses to be between a range of $53bn to $74bn, with a best estimate of $67bn.
It estimated wind losses of up to $67bn, more than $6bn in storm surge losses and more than $1bn in inland flood losses. This excluded any losses faced by the National Flood Insurance Program (NFIP), which RMS estimated could be an additional $10bn.
And while it expects most losses to be from wind, up to quarter of total insured losses including to NFIP could be from surge and flood, RMS added.
Ian smashed into Florida last week as a strong category four hurricane, causing catastrophic damage, before moving out to the Atlantic and north towards South Carolina, where it made landfall again.
Analysts and loss adjusters have only just started the long process of calculating the cost of the storm, producing a range of estimates that have slowly crept up as the number of days since the storm increase. The previous highest estimate was from Karen Clark & Company, which estimated losses from Ian to up to $63bn, which would rank the storm second only to 2005’s Hurricane Katrina, which cost re/insurers $89bn in 2021 dollars.
Similarly, Verisk has estimated industry losses could range from $42bn to $57bn across both Florida and South Carolina, excluding any costs to the NFIP or the cost of litigation, which Verisk says could push the total figure above $60bn.
US property analytics firm CoreLogic, which issued a recent update, said it expected losses to be between $31bn to $53bn. The California-based firm put Ian’s total insured wind-related losses at $23bn to $35bn and total insured flood losses at $8bn to $18bn, the majority of which were in Florida.
CoreLogic’s insured flood loss estimate includes storm surge and inland flood losses incurred by private insurers and the NFIP, which it said accounted for 75% of the total. It pegged uninsured flood losses at $10bn to $17bn.
More conservatively, S&P Global Ratings forecast Ian will result in losses of between $30bn and $40bn.
Figures from the Florida Office of Insurance Regulation (Floir) showed insurers have so far reported nearly $3.28bn of claims in the state. Of the 375,000 claims made to date, the vast majority have been for residential property, with just under 9,000 claims made for commercial property, 107 for business interruption.
The Floir reported around 91,000 claims have been made for other business lines, including specialty lines such as marine, farming and industrial extended coverage.
Separately, last week the NFIP announced it has already received 25,000 claims from Ian. The Federal Emergency Management Agency (Fema), which manages the NFIP, added as of October 4 it had provided $3.5m in advanced payments to policyholders who have started the claims process.
NFIP policyholders affected by Ian can claim between $5,000 and $25,000 with documentation before an inspection by an adjuster and Fema said it is allowing some policyholders whose coverage has expired to apply for extensions to cover damage caused by Ian.
Meanwhile, last week Citizens Property Insurance, Florida’s state-backed insurer of last resort, narrowed its loss estimate for Ian to a range of $2.3bn to $2.6bn, down from an initial estimate of as much as $3.8bn.
Thousands of loss adjusters have already descended on affected areas. Earlier this week, loss adjuster Crawford & Company announced it had deployed a near-record 1,000 loss adjusters on the ground in response to Ian.
Insurance services provider McLarens has said it has deployed teams to Florida, North Carolina, South Carolina, Georgia and Virginia, saying Florida has seen a more than ten-fold (1,110%) increase in the number of claims notifications in the last 10 days compared to the same period in 2021.
Cory Barnett, director of operations at McLarens, said: “It’s still relatively early days in loss adjusting terms, but we’re expecting these figures to remain consistent over the coming days.”
He added McLarens has deployed 80 adjusters to the event, with 30 currently on the ground.