KCC pegs total hurricane Dorian industry insured loss at $5.23bn
Hurricane Dorian is estimated to have caused an industry insured loss of $5.23 billion by catastrophe risk modeller Karen Clark & Company (KCC).
It’s a very specific modelled loss estimate for the impact the insurance and reinsurance industry may face from hurricane Dorian, with the Bahamas the source of the brunt of the costs.
For the Bahamas KCC estimates a $3.62 billion insured loss, with another $23 million in the Caribbean coming from Puerto Rico and $84 million from the U.S. Virgin Islands.
The total loss in the Caribbean and Bahamas is towards the lower end of risk modeller RMS’ recent estimate, who pegged Dorian’s impacts to the islands as between $3.5 billion to as much as $6.5 billion.
While AIR Worldwide said hurricane Dorian is estimated to have caused an insurance industry loss in a range from $1.5 billion to as much as $3 billion from its impacts to the Caribbean islands....MOREAnd:
RMS sees Dorian wind & surge Caribbean industry loss at up to $6.5bn
Hurricane Dorian is estimated to have caused a wind and storm surge related insurance industry loss of between $3.5 billion and $6.5 billion in the Caribbean and Bahamas by catastrophe risk modelling specialists RMS.
The figure is higher than another risk modelling firm AIR Worldwide which said the insurance industry loss to the Caribbean islands would be in a range from $1.5 billion to as much as $3 billion.
RMS said that its estimate represents insurance related losses, so including the volume that will fall to reinsurance and potentially insurance-linked securities (ILS), from wind and storm surge damage across the Caribbean region, mainly in the Bahamas, which was the most severely impacted country.
The modelling firm said that nearly all of the Caribbean insured losses will come from the Bahamas, particularly Grand Bahama and Abaco Islands.
Its loss estimate for the industry reflects property damage and business interruption from wind and storm surge-driven coastal flooding that impacted residential, commercial, industrial, marine and automobile lines of business, including factors for both post-event loss amplification (PLA) and non-modeled losses.
Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models explained, “There is a high degree of uncertainty on the potential impact of post-event loss amplification from this event. Nevertheless, we expect PLA in the Bahamas to be significant due to constrained access to the islands and infrastructure damage. Port closures, damaged roads, and severe damage to the airport will make it difficult to deliver the necessary labor and materials to impacted areas. It will also limit the ability of residents and business owners to return to damaged homes and buildings. Consequently, cost of materials is expected to inflate, and repairs could be prolonged, both of which are expected to amplify the cost of the claims from this event.”
RMS said that business interruption losses will be a significant component of the insurance and reinsurance market loss in the Bahamas as a result of the storm, given the fact hotels and resorts make up a large proportion of the overall commercial exposure on the most heavily impacted islands, which were Grand Bahama and Abaco.
Peter Dailey, Vice President, Model Development at RMS added, “Insured losses in the Bahamas are also expected to settle over a longer period than in a typical Caribbean hurricane given an expected spike in demand for claims adjusters, many of whom will be unable to inspect properties or even access the two main affected islands for some time.”...MORE
