Insured losses from Hurricane Ida could hit $21bn, estimates CoreLogic

Insured flood and wind losses from Hurricane Ida are estimated at between $14bn and $21bn, according to CoreLogic. As first reported in Business Insurance, the California-based provider of property information to underwriters said that insured flood losses for residential and commercial properties in Louisiana, Mississippi and Alabama are estimated to be between $6bn and $9bn. This includes both storm surge and inland flooding. Insured wind losses are estimated at $8bn to $12bn. Hurricane Ida made landfall on Sunday, less than 40 miles away from where Hurricane Katrina did the same in 2005, but the two storms were substantially different, said Tom Larsen, principal, insurance solutions, at CoreLogic. “While only 40% to 50% of the flood damages from Hurricane Ida appear to be covered by insurance, this is actually an improvement from the uninsured flood damages we saw from Hurricanes Harvey and Katrina,” he said. More than 90% of the Ida losses are estimated to be in Louisiana, primarily in the nine parishes in the New Orleans-Metairie-Hammond metropolitan area, as well as in Ascension, Lafourche, Livingston and Terrebonne parishes immediately to the west, CoreLogic said. Karen Clark & Co (KCC) estimated insured losses from Hurricane Ida will be close to $18bn, with $40m in the Caribbean and the rest from wind and storm surge losses in the US. Coastal areas of Louisiana saw significant structural damage to commercial and residential buildings from damaging winds, and low-level wind damage extended further inland into southern Mississippi, KCC said. Hurricane Ida made two landfalls — the first on 27 August near La Columba in Cuba with maximum sustained winds of 80mph, then on 29 August near Port Fourchon in Louisiana with maximum sustained winds of 150mph. Ida weakened once inland and was downgraded to a tropical storm early on 30 Aug near the Louisiana-Mississippi border. Later that day it became a tropical depression. Peak storm surge from Hurricane Ida exceeded eight feet along the Louisiana coast as the majority of the New Orleans levee system kept the potentially damaging inundation at bay, with some exceptions when water overtopped a small levee near Lafitte. In a note on Tuesday, Piper Sandler Research said early model indications show insured losses of about $15bn to $25bn for Hurricane Ida but noted these figures were “uncertain”, given it had just made landfall. Most industry sources agree that assessing Ida’s total cost will take months. The Piper Sandler research shed some light on how losses might be distributed across the insurance industry’s main players, based on their respective reinsurance positions. Chubb, for example, has a $1bn retention in the US but also sells reinsurance for which losses are hard to predict, Piper said. AIG has a complicated reinsurance programme, according to Piper Sandler. The firm has a $1.275bn per occurrence for personal lines, with attachment points varying between $50m and $150m. It has a per occurrence of $1bn in excess of $500m for southwest US and Gulf states. AIG also sells reinsurance through its operations including Validus Re, which has a $475m limit in excess of $300m. Travelers buys relatively little reinsurance. It has coverage for 75% of losses in excess of $3bn up to $5bn. For further news from Business Insurance, please click here.

Insured losses from Hurricane Ida could hit $21bn, estimates CoreLogic

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