Hurricane Henri insured loss seen close to $155m by KCC

Catastrophe risk modelling firm Karen Clark & Company (KCC) is the first to provide a modelled estimate of insurance and reinsurance market losses from hurricane Henri and it’s much lower than many will have been expecting.

KCC estimates that the insured loss from hurricane Henri will be close to $155 million, which includes privately insured damage to residential, commercial, and industrial properties, and automobiles.

The low industry loss estimate is a reflection of the fact Henri turned into a water rather than wind event, as it weakened before coming ashore in the US northeast.

The water aspect is also largely rainfall and surface flooding related, rather than storm surge, so much of the impacts seen will be handled by the NFIP, or in some cases not insured at all.

KCC explained, “Henri’s decrease in intensity before landfall allowed the northeastern US to avoid much of the damage that was originally forecast for the region. The shift in track direction, which took Henri through Connecticut and into New York, led to reduced impacts in Massachusetts, as the strongest winds did not reach Boston or Cape Cod.

“Much of the wind damage that occurred in the impacted areas was the result of downed trees and powerlines. Sustained winds of 60 mph were observed near Plum Island, New York, and winds over 40 mph were observed along the Rhode Island coast. Low-level winds extended inland, and tree damage was reported throughout Rhode Island, eastern Connecticut, and central and southern Massachusetts. More than 100,000 customers lost power as a result of the storm.

“Henri’s slow forward speed brought heavy rain to the northeastern US from northern New Jersey to southern New England. Rainfall totals exceeded nine inches in Brooklyn, New York and Middlesex County, New Jersey, overwhelming drainage systems and waterways.

“Floodwater inundated homes, businesses, and roadways and submerged vehicles in multiple New Jersey counties such as Middlesex, Bergen, and Essex, and several major roadways were flooded in parts of Connecticut, including in Manchester and Vernon.”

As we reported yesterday, BMS Group had said that it expected the industry loss would not reach the billion dollar mark and that as a result not much of the losses from storm Henri would fall to the reinsurance market.

The modelled industry loss estimate from the KCC US Hurricane Reference Model reinforces this view, that storm Henri will be another narrow miss for the industry, as its loss impact for insurance and reinsurance capital could clearly have been larger were it not for the last-minute weakening as it approached the coast.