The Denver, Colorado hail storm that struck the Front Range are on May 8th 2017 is expected to be the most costly insured loss in the state’s history, with the insurance and reinsurance industry estimated to be on the hook for $1.4 billion of losses.
The estimate from the Rocky Mountain Insurance Information Association is significantly above the previous state record hail storm loss, which stood at $845.5 million for a July 20th 2009 storm and also surpasses a July 11th 1990 storm, which would have been most expensive if adjusted for exchange rate with today.
Golf ball and baseball-sized hail caused widespread damage to homes, cars and businesses in the area, with the largest hail striking areas to the west of Denver, including Wheat Ridge, Golden and Lakewood.
“The enormous size of the hail hitting densely populated areas of the Denver-Metro during rush hour has contributed to the magnitude of damage caused by this storm,” commented Carole Walker, Executive Director of the Rocky Mountain Insurance Information Association. “Add to that Colorado’s population boom, escalating costs to repair high-tech cars and more expensive homes, the insurance price tag on our hailstorms can be expected to continue to rise.”
The Association estimates that over 150,000 car insurance claims and 50,000 homeowners insurance claims have been filed so far.
The estimate of insurance and what will subsequently be reinsurance industry losses is preliminary and based on reported data from the majority of the Colorado insurance company market share.
Being preliminary the final loss could well be higher, as insurance and reinsurance industry losses typically rise rather than fall once claims are finally settled.
This is yet another loss from severe convective weather in 2017 that is likely to hit some collateralized reinsurance arrangements, resulting in some insurance-linked securities (ILS) funds being hit with small or attritional losses as a result.
The table below shows that this hail storm loss in the Denver area is without a doubt the largest insurance industry loss ever suffered in Colorado state.
|Date||Location||Cost When Occurred|
|May 8, 2017||Denver Metro||$1.4 Billion||NA|
|July 20, 2009||Denver Metro||$767.6||$845.5|
|July 11, 1990||Denver Metro||$625.0||$1.1 Billion|
|June 6-15, 2009||Denver Metro||$353.3||$389.2|
|July 28, 2016||Colorado Springs||$352.8||$352.8|
|June 6-7, 2012||CO Front Range||$321.1||$330.5|
|June 13-14, 1984||Denver Metro||$276.7||$629.3|
|July 29, 2009||Pueblo||$232.8||$256.5|
|September 29, 2014||Denver Metro||$213.3||$213.4|
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