Hurricane Beryl US loss estimates now up to $4.5bn

Insured losses from last week’s Hurricane Beryl in Texas and the US will reach between $2.5bn and $4.5bn, according to Moody’s RMS. Following estimates from other modellers, RMS’s top end of the range is the highest so far, although it said this includes damage from storm surge and flooding caused by precipitation, as well as property and business interruption losses. Less than $300m of flood claims from Hurricane Beryl are likely to fall on the US National Flood Insurance Program (NFIP), RMS said. It settled on a best estimate of $3.7bn falling on the private insurance market for the storm’s impact in the US, with the bulk of the losses at between $2.3bn and $4.2bn from wind damage. RMS estimates that non-US insured losses from Hurricane Beryl in the Caribbean and Mexico will not exceed $1.5bn. This compares with CoreLogic’s revised estimate of insured losses in Texas at between $2.5bn and $3.5bn and KCC’s estimate of $2.7bn in the US. Jeff Waters, director of North Atlantic hurricane models at Moody’s, said: “Hurricane Beryl was yet another complex and impactful event across multiple fronts and regions. Parts of the Caribbean sustained catastrophic damage that will unfortunately take a long time to fully recover.” He added that Beryl ran out of room to intensify in the Gulf of Mexico, which reduced the impact on the insurance and reinsurance market, before making landfall in Texas. But he explained that the storm maintained intensity and recorded some of the strongest wind speeds in recent history over the Houston Metro area. “Texas building codes – while not as stringent as those of other states – should allow most structures to withstand the winds reported from Beryl, but with the region’s high exposure density, significant amounts of expected minor/moderate damage will contribute to the overall total insured losses,” Waters said. Raj Vojjala, managing director of model development at Moody’s, added that the final bill could be aggravated by a number of factors. “In addition to wind and water modelled impacts from Beryl, numerous treefall-related damages, infrastructure washouts to roads and railways, and tornado-related damages were reported. Together with significant power outages (over two million at peak), all could exacerbate damage, prolong repairs and business interruption, and cause pockets of claims inflation,” Vojjala said. He added that there is precedent. “After Hurricane Harvey in 2017, South Texas witnessed notable coverage leakage from inland flood on wind policies and litigation-related impacts, and to a much lesser degree, Beryl may also produce similar effects.” The earliest Category 5 hurricane in the North Atlantic Basin on record, Hurricane Beryl made its third landfall in Texas on 8 July after first landing in Grenada’s Carriacou Island and Mexico, where it missed the developed resorts on the Yucatán Peninsula. Julie Serakos, managing director of product management at Moody’s, said: “We expect most insured losses from Beryl to be retained by primary insurers, and some economic losses, particularly in the Caribbean, to be aided by triggering parametric coverage in place.” She added that Hurricane Beryl has “sets the tone” for a widely anticipated active North Atlantic hurricane season. “All (re)insurance value chain market segments need to prepare to monitor and respond to unfolding events, with the latest Moody’s RMS modelling tools and exposure datasets reflecting the most current and complete views of the hurricane risk landscape,” Serakos said.

Hurricane Beryl US loss estimates now up to $4.5bn

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