Verisk’s AIR Worldwide has raised its estimated insured loss range for Hurricane Ida to $20 billion to $30 billion, after adding the impacts of inland flooding to its initial assessment.
The catastrophe modeller has maintained its earlier estimate of $17 billion to $25 billion for insured wind and storm surge losses, but has factored in an additional $2.5 billion to $5 billion of private-market insured losses from inland flooding.
Included in the estimates are losses to onshore residential, commercial, industrial properties, and automobiles for their building, contents, and time element coverage, as well as estimated insurance take-up rates for wind and flood across the entirety of Ida’s track, including the flooding that occurred in the Northeast.
However, it is important to note that AIR’s losses do not include any estimate of losses from the National Flood Insurance Program, or any losses from offshore assets.
Hurricane Ida made its first landfall as a Category 4 storm near Port Fourchon, Louisiana, about 60 miles south of New Orleans, with a maximum sustained wind speed of 150 mph.
The remnants of Hurricane Ida went on to impact the North-easterly states of the US and caused flooding damage and disruption across the region. Flooding was reported from Pennsylvania to Massachusetts, with New York, New Jersey, and Pennsylvania bearing the brunt of the impact.
In addition to the precipitation-induced flood impacts, damage was reported across several states due to hurricane-spun tornadoes, and some of the neighborhoods across the inland and northeastern states saw damage resulting from trees falling on homes.
AIR’s updated estimate is actually significantly lower than the figures released by other modellers so far, such as RMS, which puts insured losses in the Gulf region alone at between $25 billion and $35 billion.
Goldman Sachs likewise puts losses at $30 billion to $40 billion, while CoreLogic believes the Gulf loss will set re/insurers back by around $21 billion, with the prospect of a further $16 billion to $24 billion in economic losses in the Northeast, of which a considerable portion will likely be insured.
That said, it should be noted that AIR’s figures do not include NFIP losses, hurricane-spun tornados, losses to inland marine, ocean-going marine cargo and hull, and pleasure boats, losses to infrastructure, and losses to US offshore assets and non-US property, amongst others.
Compounding re/insurance losses in the aftermath of Ida is the cost of materials, which have risen significantly over the past year due to supply chain disruption in the construction market, AIR and Xactware analysis shows.
Although these costs have moderated since their peak in July when they were 80% higher than September of last year, they remain about 30% higher.