Hurricane Delta, which made landfall near Creole, Louisiana, on Friday, October 9th as a mid-Category 2 storm, is expected to result in total onshore U.S. insured losses of between $2 billion and $3.5 billion, according to catastrophe risk modeller RMS.

(NASA via AP)
This estimate from RMS includes wind, storm surge, and inland flood losses across Louisiana, Texas, and Mississippi. The $2 billion to $3.5 billion range includes losses to the National Flood Insurance Program (NFIP) of between $200 million and $400 million.
Additionally, RMS estimates insured losses from Delta in Mexico to amount to less than $500 million, while the cat risk modeller estimates that insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico will not exceed $1 billion from wind and wave-driven damages.
So, overall, RMS estimates onshore insurance and reinsurance industry losses of as much as $4 billion from Hurricane Delta, with the offshore insured loss expected to add as much as $1 billion to this total.
“The overlapping nature of Delta and Laura will create a complicated claims management and loss attribution process for the industry. Using an innovative combination of high-resolution aerial imagery and machine-learning techniques, the modeling teams at RMS assessed the competing impacts of Hurricane Laura on Hurricane Delta losses.
“We determined that more than half of the impacted postal codes were also impacted by Laura, representing more than 90% of loss in this event. While Delta caused higher than expected damage to many structures due to pre-existing damage from Laura, reduced overall exposure-at-risk in the overlapping region after Laura means losses attributed to Delta will end up being lower than if Laura had never happened,” said Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models.
In total, the RMS estimate includes a 15% reduction in insured onshore losses as a result of the cumulative impacts of Hurricane Laura, which hit many of the same areas just six weeks ago.
In the U.S., RMS puts insured losses from wind and storm surge at between $1.7 billion to $2.8 billion, inland flood at between $100 million to $300 million, and NFIP losses at between $200 million and $400 million, resulting in a high-end total of $3.5 billion.
Losses here reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, as well as post-event loss amplification and non-modelled sources of loss. The company notes that it expects that the majority of insured losses will be from residential lines.
In Mexico, the estimate includes property damage and business interruption to residential, commercial, and industrial lines of business.
“Unlike Laura, which impacted several deepwater oil and gas platforms earlier in the season, we expect offshore losses from Delta to be driven mainly by shallow water platforms. The storm shut in oil and gas production in the region up to levels not seen since Hurricanes Katrina, Rita, and Ike. However, Delta’s lower intensity and size while in the Gulf limited the wave heights and consequently, offshore losses are expected to be notably lower than those experienced in the 2005 and 2008 events,” said Rajkiran Vojjala, Vice President, Model Development.
To compare with other re/insurance industry loss estimates for the storm, KCC recently pegged the insured loss to onshore properties from the impacts of Hurricane Delta at close to $1.25 billion. This was followed by CoreLogic’s estimate for insured wind losses for residential and commercial properties in Louisiana and Texas of up to $900 million, and AIR’s estimate of up to $3 billion of industry losses to onshore properties.
Pete Dailey, Vice President, Model Development, commented: “As expected, Delta weakened from major hurricane status to a weaker Category 2 storm just before landfall due to a combination of conditions, including high wind shear and cooler sea surface temperatures, both of which restrain a hurricane’s intensity. However, winds strong enough to cause damage expanded in width, increasing the number of coastal properties at risk. Fortunately, Delta rapidly weakened after landfall, which reduced the material wind and water-driven impacts across interior portions of the Gulf states.”