Major hurricane Ian is estimated to have caused an insurance and reinsurance industry loss of between $28 billion and $47 billion just from wind and storm surge damage in Florida, according to CoreLogic.
Calling hurricane Ian the “costliest Florida storm since hurricane Andrew”, CoreLogic said the impacts of the storm will have an “industry-changing impact” on the future of sectors like the real estate industry and infrastructure in Florida.
Hurricane Ian’s insured wind losses are estimated at $22 billion to $32 billion alone, with another between $6 billion and $15 billion of insured storm surge losses, according to CoreLogic’s post-landfall analysis of the storm.
Almost 20,000 residential properties are estimated to have been affected by Category 4 hurricane force winds and surge, in the stretch of coastline from Cape Coral to Fort Myers, Florida.
But, overall, CoreLogic’s analysis suggests as many as 887,221 residential properties have been affected by at least Category 1 wind or storm surge from hurricane Ian.
“This is the costliest Florida storm since Hurricane Andrew made landfall in 1992 and a record number of homes and properties were lost due to Hurricane Ian’s intense and destructive characteristics,” explained Tom Larsen, Associate Vice President, Hazard & Risk Management, CoreLogic. “Hurricane Ian will forever change the real estate industry and city infrastructure. Insurers will go into bankruptcy, homeowners will be forced into delinquency and insurance will become less accessible in regions like Florida.”
At from $28 billion up to $47 billion of insurance and reinsurance market losses just from hurricane Ian’s wind and storm surge, this estimate firmly sets the lower-bounds for an industry loss at $30 billion, as the figure would be expected to rise into this range.
This also doesn’t include any National Flood Insurance Program (NFIP) or private insurance market losses from surface flooding due to hurricane Ian’s rainfall. But it does include NFIP and non-NFIP related surge claims.
The recovery from hurricane Ian is expected to be “slow and difficult” for Florida, with inflation at a 40-year high, interest rates nearing 7%, and labor as well as materials still high in demand, CoreLogic said.
“We’re at a crossroads with Hurricane Ian in terms of adapting to today’s catastrophe risk environment,” Larsen said. “Infrastructure and building codes will evolve so that we can be more resilient ahead of what are bound to be more history-making storms in the near future. We cannot just rebuild; we need to restore for resilience.”
These post-landfall insurance industry loss estimates for hurricane Ian from CoreLogic are based on the September 29 8 a.m. PT National Hurricane Center (NHC) advisory of the storm.
The estimate includes insured losses from damage to residential homes and commercial properties, including contents and business interruption and CoreLogic said it will put out a flood loss estimate in due course.
Being the first official post-landfall estimate, CoreLogic’s numbers set a useful baseline, pointing to hurricane Ian definitely becoming a $30 billion plus industry event, with the potential to be significantly higher once the final claims tally is in.
While some efforts to include inflationary effects has likely been made, the estimates may not include any weighting for the potential issues Florida’s insurance market problems could layer on top, meaning the higher half of the range may be the place to look for an eventual insurance, reinsurance and of course insurance-linked securities (ILS) market loss total.