Monday, October 24, 2016

"Hurricane Matthew insured loss up to $5bn U.S., $3bn Caribbean..."

From Artemis:
The insurance and reinsurance industry could face losses from hurricane Matthew of up to $5 billion for damage in the U.S. and up to $3 billion for damage across the Caribbean, according to risk modelling firm RMS.

RMS is the latest to provide an official estimate of insured losses due to recent hurricane Matthew and the figures are roughly in-line with the consensus, although U.S. figures are towards the lower end of estimates which will be encouraging for the re/insurance industry.
RMS hurricane Matthew trackRMS told clients yesterday and reported today that the firm estimates that U.S. insurance losses from Hurricane Matthew will be in a range from $1.5 to $5 billion, while insured losses in the Caribbean will be between $1 and $3 billion, with the majority coming from The Bahamas.

The company expects that around 70% of the estimated U.S. loss is to residential insurance lines, while coastal flooding due to storm surge is likely to contribute around 30% of the all-lines loss. This includes an expectation of coverage leakage and an escalation in claims severity for wind-only policies in situations where RMS says wind and water hazards both feature in residential lines of business.

Interestingly, RMS said that just one of the ten event reconstructions the firm modelled resulted in a U.S. insured loss of over $4 billion, perhaps suggesting that the insurance and reinsurance industry faces a slightly lower bill than had been anticipated.

But RMS warns that there is still a small possibility that U.S. losses from hurricane Matthew affecting the insurance and reinsurance industry could reach as high as $5 billion.

Both of the insured loss estimates, for the U.S. and Caribbean, include property damage and business interruption, caused by wind and coastal flooding upon residential, commercial, and industrial lines of business. For the U.S, auto lines of business are also included. The firms estimate does not include losses to the National Flood Insurance Program (NFIP) or to public buildings and infrastructure....MORE