According to industry sources, catastrophe risk modeller AIR Worldwide’s preliminary estimate of insurance and reinsurance market losses from hurricane Laura was pegged in a range from $4.8 billion to as high as $9.2 billion.
We understand this is not an official industry loss estimate from AIR, that should be expected in the coming days we believe.
Rather this is the kind of preliminary modelled industry loss estimate provided to insurance, reinsurance and insurance-linked securities (ILS) market clients by catastrophe risk modelling firms, while a storm is still in the water, or after it has just struck land.
Estimates range widely in the industry it seems.
Our sources had been largely discussing a range from $8 billion to as high as $14 billion.
With those figures in mind, AIR’s estimate perhaps seems a little low.
But this was likely made using data on historical or simulated hurricane events, wind and surge, rather than being based on a full evaluation of the landfall and onshore impacts of major hurricane Laura.
As a result, it would not surprise us to see AIR’s official estimate having a top-end into the double-digit billions when it is released next week, although perhaps not as far into the double-digits as some might have anticipated for a Cat 4 landfall.
Update: AIR’s first official loss estimate is now available, with the company saying onshore property insured losses would be between $4 billion and $8 billion.