Insurers could take the $ 18 billion hit from Hurricane Ida – industry experts


(Reuters) – Insurers brace for an estimated $ 18 billion impact of Hurricane Ida in the United States and the Caribbean, disaster modeling firm Karen Clark & ​​Co (KCC) said on Wednesday .

A rainbow can be seen in the background as Jody Galliano, who has said he is linked to the city’s founders, cleans up debris from his yard in the wake of Hurricane Ida in Galliano, Louisiana, United States, August 31, 2021. REUTERS / Adrees Latif

The number, closer to the lower end of initial estimates given by insurance analysts as the storm still raged earlier this week, is the first from one of the leading risk modeling experts in the industry.

KCC said $ 40 million in insured losses would occur in the Caribbean and the remainder of wind and storm surge losses in the United States.

Hurricane Ida made landfall in the United States on Sunday as a Category 4 storm, after sweeping the coasts of the Gulf of Mexico, inundating large areas in heavy waves and torrential rains.

Earlier in the week, insurance experts estimated claims from Hurricane Ida at $ 15 billion to $ 30 billion, but warned that figure could be higher, in part because of pandemic prices that have pushed up the cost of wood and labor to rebuild.

The sweeping estimates, based on models that track the severity and trajectory of the storm, are still likely well below the $ 87 billion in claims from Hurricane Katrina in 2005, after adjusting for inflation, according to the experts.

Rating agency Fitch said Ida’s losses would likely exceed those from winter storm Uri at $ 15 billion and Hurricane Laura – the costliest insured catastrophic event of 2020 – at $ 10 billion. .

KCC said its data showed Ida was tied with the island’s last hurricane in 1856 and Hurricane Laura in 2020 for the strongest maximum sustained winds landing in Louisiana.

Its forecast includes damage to privately insured residential, commercial and industrial properties and automobiles, and excludes ships, offshore properties, or losses that fall under the United States’ National Flood Insurance Program.

UBS analysts said the fallout from Ida would hit Swiss Re and Lancashire earnings per share the hardest, by 32% and 30% respectively, while reinsurance industry leaders Hannover Re and Munich Re , would be the least affected.

Reporting by Noor Zainab Hussain in Bengaluru and Carolyn Cohn in London; Editing by Saumyadeb Chakrabarty and Shinjini Ganguli


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