Wednesday, September 19, 2018

Hurricane Florence INSURED Losses Coming In At the Low End of Estimates (ex-flood)

As noted September 11, before the storm made landfall:
Insurance: "Hurricane Florence takes aim as major storm. What’s at risk?"
Folks are already talking about $25 billion in total losses but the insured portion and the commercially insured portions are considerably lower perhaps $20 billion and $10-15 billion respectively depending on how much damage is ascribed to flooding (NFIP) and how much to wind and business interruption....
Those distinctions are important for the people suffering damages and for the insurers.
Two from Artemis:

September 17
Hurricane Florence loss only $2.5bn (ex-NFIP), says Karen Clark & Co.
According to catastrophe risk modelling specialists Karen Clark & Co. the insurance market loss from hurricane Florence is likely to be only around $2.5 billion, based on privately market wind, storm surge, and inland flooding damage to residential, commercial, and industrial properties as well as automobiles.

The $2.5 billion private market-wide loss estimate for insurance and reinsurance interests is perhaps the lowest figure seen yet, suggesting that despite the widespread devastation across the Carolinas the industry will not be hurt by Florence.
Karen Clark & Co’s insured loss estimate does not include the losses to the National Flood Insurance Program (NFIP) and also it’s not clear if it includes any items such as business interruption.
It appears to be solely focused on privately insured property damages from wind, storm surge and inland flooding, to residential, commercial and industrial property, plus auto damages.
KCC’s insurance and reinsurance industry loss estimate compares to Corelogic’s $3 billion to $5 billion just from wind and surge damage, and analysts expectations that it could reach $10 billion to $15 billion including the NFIP, but with reinsurers and ILS only taking a minimal share....MORE

September 18
Hurricane Florence wind & storm surge loss up to $4.6bn: AIR
The impact to insurance and reinsurance interests from the wind and storm surge damage caused by hurricane Florence is estimated to be in a range from $1.7 billion to as much as $4.6 billion, by AIR Worldwide.
The catastrophe risk modeling firm said today that industry insured losses from hurricane Florence’s winds and storm surge could reach as high as $4.6 billion, but this will not be the total insurance and reinsurance market loss as it does not include any estimate of the ongoing flooding event caused by precipitation from the storm.
“Hurricane Florence, once a Category 4 storm, made landfall near Wrightsville Beach, North Carolina, at about 7:15 a.m. on Friday, as a Category 1 storm with 90 mph winds,” commented Dr. Peter Sousounis, vice president and director or meteorology, AIR Worldwide. “As Florence approached the East Coast, it grew in size and exhibited multiple wind maxima, which are found in storms with abnormally low central pressure for a given maximum wind speed. As a consequence, strong winds extended well north of the landfall location up to the Outer Banks and into Pamlico Sound, which caused a high storm surge in this area.”

AIR noted that the slow movement of Florence has ensured that the main impact will be from precipitation induced flooding, however storm surge will be a component of the insurance and reinsurance market loss, with up to 10 feet recorded in coastal North Carolina....MORE
The estimates will rise but it appears they will not even hit the low end of our best guess, the $10 billion figure.
Of course that guess was made when the storm was a cat 4 but still, it shows just how tricky the whole complex-chaotic prediction biz can be.