The insurance and reinsurance industry loss from hurricane Harvey has been estimated at $15.4 billion by catastrophe risk modelling firm Karen Clark & Company, excluding the impacts to the National Flood Insurance Program (NFIP).
Loss estimates are coming thick and fast now, as the impact of hurricane Harvey is gradually becoming clearer. However it is still early days and any estimates are unlikely to be spot on at this stage, so some creep either way is to be expected in the coming weeks.
Karen Clark & Co. put the total insurance industry loss at $15.4 billion, made up of $2.5 billion of wind losses, $500 million of storm surge losses and $12.4 billion of inland flood losses.
Given this does not include the NFIP’s exposure, there could be another $1 billion added to this if the NFIP’s reinsurance program pays out in full, as it’s now thought likely to.
The $12.4 billion of inland flood loss is interesting as it’s perhaps a higher figure than many had originally anticipated, but as the flooding worsened and with waters set to linger, the impact to commercial property insurance in particular is expected to be high.
At this level of insurance and reinsurance industry loss, hurricane Harvey will be the most costly hurricane in Texas history, based on costs at the time of impact. But Karen Clark notes that two historical Category 4 hurricanes, the 1900 and 1915 Galveston hurricanes, would have caused over $50 billion each in insured losses if they occurred today.
Other hurricane Harvey loss estimates out today include Morgan Stanley analysts suggesting a loss of up to $25 billion, excluding the NFIP, and Moody’s Analytics saying the economic loss could be as high as $108 billion.