According to catastrophe risk modelling specialists Karen Clark & Co. the insurance market loss from hurricane Florence is likely to be only around $2.5 billion, based on privately market wind, storm surge, and inland flooding damage to residential, commercial, and industrial properties as well as automobiles.
The $2.5 billion private market-wide loss estimate for insurance and reinsurance interests is perhaps the lowest figure seen yet, suggesting that despite the widespread devastation across the Carolinas the industry will not be hurt by Florence.
Karen Clark & Co’s insured loss estimate does not include the losses to the National Flood Insurance Program (NFIP) and also it’s not clear if it includes any items such as business interruption.
It appears to be solely focused on privately insured property damages from wind, storm surge and inland flooding, to residential, commercial and industrial property, plus auto damages.
KCC’s insurance and reinsurance industry loss estimate compares to Corelogic’s $3 billion to $5 billion just from wind and surge damage, and analysts expectations that it could reach $10 billion to $15 billion including the NFIP, but with reinsurers and ILS only taking a minimal share.
Should the eventual loss from property damage be as low as KCC estimates the share that will flow to the ILS market and collateralized reinsurance or retrocession will likely only be a relatively small component of it.
With the flooding expected to only peak around Wednesday of this week in some areas, once rainfall waters have run back down from the mountains, the flood component of the insured loss could growth though.
– Reinsurance & ILS market share of Florence loss likely minimal: Analysts.
– Cat bond index only fell 1.15% on hurricane Florence threat.
– Hurricane Florence’s 1,000 year rains flood the Carolina’s.
– Model mean projects $3bn to $3.5bn wind loss from Florence.
– Hurricane Florence re/insurance losses will be manageable: S&P.
– Hurricane Florence wind & surge insured loss potential put at $3bn to $5bn: Corelogic.
– A handful of cat bonds traded on hurricane Florence approach.
– ILS fund values fluctuate on Florence, threat now reduced.
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