A recent poll of over 1,050 insurance and reinsurance market observers and participants suggests that Hurricane Ian is likely to result in an industry loss of more than $50 billion, although a surprising number of respondents feel the ultimate hit to re/insurance interests will be less than $40 billion.
As Hurricane Ian approached its third landfall, and second in the U.S. with hurricane-force winds, Reinsurance News asked readers how high the industry loss might be from one of the strongest storms to ever hit the State of Florida.
More than 1,050 people from across the insurance and reinsurance sector responded to the poll.
Of this, 33% said that they expect the re/insured loss from hurricane Ian’s wind, surge, and flooding (excluding NFIP) impacts to exceed the $50 billion mark, which would make it one of the costliest catastrophe loss events ever for insurers and reinsurers.
The Hurricane Ian industry loss range of $40 billion to $50 billion received 23% of the votes. Interestingly, the even lower industry loss range of $30 billion to $40 billion received 30% of the votes, which is surprising given recent loss estimates from modellers and analysts. The lowest range of our poll, up to $30 billion, received just 14% of votes.
It’s interesting how mixed the responses are and is a reflection of the complexity of understanding the industry loss from this type of event, especially so soon after the fact.
Soon after Ian caused significant damage to properties and infrastructure in Florida, and while the storm was ongoing and approaching the South Carolina coastline, some very early loss estimates were released.
The most recent of these estimates is from Karen Clark & Company (KCC), which pegs the privately insured loss at around $63 billion, the majority of which is from the U.S. Hurricane Ian’s first landfall in Cuba, while devastating for the region, is only expected to drive minimal insured losses, in part as a result of lower insurance penetration when compared with Florida and the Carolinas.
Other estimates range from $30 billion to $50 billion. It’s important to note that these estimates exclude NFIP losses and also offshore losses, suggesting the ultimate toll will come in above any of these early estimates.
Analysis by Peel Hunt notes that as initial data on casualties and economic losses becomes apparent, the average insured losses are nearing the $50 billion mark, “and may well rise above this.”
For context, 2005’s hurricane Katrina is estimated to have driven re/insured losses of $82 billion (in 2017 dollars), while the combined impacts hurricanes Harvey, Irma, and Mariah in 2017 is estimated to have resulted in insured losses of around $92 billion (in 2017 dollars).
On an economic basis, it’s expected that Hurricane Ian will drive losses of way over $100 billion.
Following its initial landfall in Cuba, Hurricane Ian strengthened over warmer waters in the Gulf of Mexico, reaching Category 4 status with winds of 155 mph as it made landfall along Florida’s coastline. After causing havoc as it moved through the state, the storm weakened before reaching the Atlantic, where it regained hurricane strength ahead of a Cat 1 landfall near Georgetown on Friday evening.
According to the National Hurricane Centre, the storm is now dissipating across southern Virginia.
So far, at least 87 people have been confirmed to have died after Hurricane Ian battered the U.S.