RMS estimates insured losses of up to $35bn from Hurricane Ida

RMS estimates that insured onshore and offshore losses in the Gulf of Mexico from Hurricane Ida will be between $25bn and $35bn, including up to $4bn for the US National Flood Insurance Program (NFIP).

The number is higher than earlier estimates, but includes wider perils and damages covering wind, storm surge and inland flooding across the impacted US states of Alabama, Florida, Louisiana and Mississippi. It excludes wind and inland flooding impacts in the Ohio Valley, mid-Atlantic and northeast US regions, which will be announced in the coming days once the full extent of damage is known.

The RMS estimate is broken down into insured losses of $21bn-$28bn for wind and storm surge. The inland flood loss estimate is between $1bn and $1.5bn, and the NFIP loss to Gulf states alone is $2.3bn to $4bn. Offshore energy loses are estimated to range between $0.7bn and $1.5bn.

RMS expects insured wind losses to be driven by residential lines, and insured water-related losses to be dominated by commercial and industrial lines.

AIR Worldwide last week placed insured losses to onshore property from Hurricane Ida’s winds and storm surge between €17bn and €25bn.

The loss estimate includes physical damage to property and contents from winds, wind-borne debris, storm surge and the impact of demand surge.

The industry loss estimates also reflect an adjustment to account for increased material and other repair costs in the current construction market. Hurricane precipitation-induced flood losses are not included in the AIR estimate.

The loss estimates are growing. Karen Clark & Company (KCC) was early out of the blocks and put losses at $18bn, with $40m in the Caribbean and the rest from wind and storm surge in the US.

The estimate included privately insured damage to residential, commercial and industrial properties and automobiles. It did not include boats, offshore properties or NFIP losses.

CoreLogic, a California-based provider of property information to underwriters, placed insured flood and wind losses from Hurricane Ida at between $14bn and $21bn.

The firm estimated that insured flood losses for residential and commercial properties in Louisiana, Mississippi and Alabama would be between $6bn and $9bn. This included both storm surge and inland flooding. Insured wind losses were estimated at $8bn to $12bn.

Jeff Waters, senior product manager, RMS north Atlantic hurricane models, said: “Ida was truly a multi-faceted event in terms of hazard and loss impacts. RMS virtual reconnaissance efforts and analysis of aerial imagery show widespread wind and water-related damage in Louisiana and neighbouring Gulf Coast states, including many severe or total structural losses. From a wind perspective, this storm was a design-level event, where observed wind speeds often exceeded speeds that buildings have been designed to withstand, particularly in the hardest-hit areas in southern Louisiana.

“Many areas impacted by Ida’s winds were also impacted by storm surge, precipitation-induced flooding and the hurricane events of 2020. In these instances, loss attribution and differentiation may become more complex, leading to longer claims settlement periods,” he added.

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