From Artemis:
A Category 5 hurricane striking the Miami area of Florida, as 2017’s Irma looked set to do, would result in over $200 billion of insured residential property losses alone, according to Karen Clark & Company (KCC), suggesting the full toll to insurance and reinsurance interests would be much higher.
Catastrophe risk modelling specialists Karen Clark & Company (KCC) said that such a strong Category 5 storm is among the worst case scenarios it has in its catalogue of more than 90,000 hurricanes and very similar to the scenario hurricane Irma at one time threatened back in 2017.
The fact a $200 billion plus loss could come from residential insured property losses alone is significant, as commercial property losses can make up as much as 10% or 20% of a hurricane impact on Florida and the Miami region would see this towards the higher-end, we’d assume, given the high value commercial buildings in the area.
That’s not even considering the huge amount of business interruption and contingent business interruption losses that such a worst case Category 5 hurricane impact on Florida could cause.
As well as the direct insured impacts, plus contingent impacts, all of which would take their toll on reinsurance and insurance-linked securities (ILS) capital sources, there would also be less direct impacts to come from damage to infrastructure from such a powerful storm, which would exacerbate the business interruption and mean it took the state of Florida and Miami-Dade area in particular, much longer to recover.
KCC said today that the Florida Commission on Hurricane Loss Projection Methodology (FCHLPM) has certified its KCC US Hurricane Reference Model Version 2.0, as implemented in the firms RiskInsight® 4.9.2 risk modelling platform.
That makes this hurricane risk model the first new model certified by the FCHLPM since 2006, KCC said....MUCH MORE
