Based on current knowledge and industry loss estimates from the impact of hurricane Harvey on the state of Texas, it will be one of the most costly insured loss events to hit the state, and one of the worst flood events to strike Houston, on record, according to RBC Capital Markets.
It remains unclear exactly how high the overall economic and insured loss will be from the impact of hurricane Harvey, with reports across the global insurance and reinsurance industry highlighting the flood element as a key uncertainty, while an initial wind and storm surge estimate has been produced by AIR Worldwide.
Based on a $10 billion insured loss, with estimations ranging between $10 billion and $20 billion, Harvey would be the ninth most costly insured loss to hit Texas, says RBC, which uses the ICAT damage estimator to compare the event to historical landfalling storms in Texas.
Furthermore, RBC states that Harvey “will almost definitely be more costly in terms of insured losses than Tropical Storm Allison (2001), which was considered the worst flood event in recorded history for Houston.”
RBC notes that Alison, in 2017 values, incurred an economic loss of $11.9 billion, with $5 billion of this being covered by insurance. So far, Moody’s analysts have suggested that Harvey could drive an economic loss of up to $75 billion, with catastrophe risk modeller RMS recently estimating that wind, surge and flood losses from Harvey could be as high as $90 billion.
