Reinsurance News

Hurricane Ian re/insured wind and flood losses could reach $53bn, says CoreLogic

7th October 2022 - Author: Luke Gallin

CoreLogic, a global provider of property information, analytics, and data-enabled solutions, has raised its re/insurance industry loss estimate for the wind and flood impacts of hurricane Ian to between $31 billion and $53 billion.

Source: Nasa Earth Observatory/AFP

The latest figures from CoreLogic peg the insured wind loss in Florida at between $22 billion and $32 billion, with an additional $1 billion to $2 billion in South Carolina, and <$500 million in other states. This gives an insured loss range of $23 billion to $35 billion from wind impacts.

In terms of flood, CoreLogic has provided a re/insured loss range of $8 billion to $16 billion in the State of Florida, <$1 billion in South Carolina, and <$1 billion in other states, resulting in a total insured flood loss range of $8 billion to $18 billion.

It’s important to note that CoreLogic’s flood numbers include private and NFIP insured losses for both storm surge and inland flood. The firm estimates that losses to the NFIP will account for around 75% of the total insured flood loss.

Combined, wind and flood insured losses in Florida is estimated to be between $30 billion and $48 billion, according to CoreLogic. In South Carolina the range is $1 billion to $3 billion, with the firm estimating a <$2 billion insured win and flood loss for other states.

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Across all impacted states, the wind and flood insured loss is estimated to be between $31 billion and $53 billion.

CoreLogic also estimates uninsured flood losses of between $10 billion and $16 billion in Florida, alongside <$500 million of uninsured flood losses in both South Carolina and other states, resulting in an uninsured flood loss total of between $10 billion and $17 billion.

So, on an economic basis, CoreLogic has estimated that the flood and wind impact in Florida will fall somewhere between $40 billion and $64 billion, with an additional $1 billion to $3 billion in South Carolina, and a further <$2 billion in other states.

This gives an economic loss range across the impacted states of between $41 billion and $70 billion from the wind and flood caused by hurricane Ian.

On September 30th, CoreLogic estimated that the insurance and reinsurance industry losses from Hurricane Ian could reach $47 billion, so the expected hit for the industry and overall has risen.

Tom Larsen, senior director of Hazard and Risk Management, CoreLogic, commented: “In many areas the flood extent approximates the SFHA boundaries, a clear indication that SFHA is a useful tool for city planners who wish to understand flood risk and mitigate flood damages.

“Without constraints in development in the SFHA, flood damages would have skyrocketed. Learning from this riverine flood event will help city planners make better decisions about where residential development makes sense, from standard construction homes to manufactured home communities.”

“The key reason Hurricane Ian is so economically destructive is due to the massive growth in coastal real estate in Florida,” he continued. “Florida’s population has grown 50% since 1992 when Hurricane Andrew hit Miami, with disproportionately more growth in South Florida. The extra costs incurred from the surge in repair needs simultaneous with a fragile economy are headwinds to rapid reconstruction and we should expect to see resident displacement and housing affordability issues in the state for some time to come.”

Selma Hepp, interim lead of the Office of the Chief Economist, CoreLogic, added: “Housing markets in Florida will face difficult times as many Florida residents have been impacted by the devastating storm.

“Initially, we are likely to see an increase in mortgage delinquencies as is typical following catastrophes. Also, rents are likely to jump as households who lost their home seek immediate shelter. Longer term, home price growth in hard hit areas is likely to lag that of the rest of the state and nation as people may opt to move to areas less prone to natural disasters. CoreLogic observed this trend in the Gulf Coast region following Hurricanes Laura, Delta and Ida.”

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