Insurance claims due to the impact of hurricane Irma are rising above $10.2 billion, with the total reported by the regulator in Florida having now neared $8 billion, while a French insurance association reports claims in the Caribbean are now expected to reach $2.26 billion.
Other industry estimates of insurance and reinsurance losses due to hurricane Irma in the United States largely range from $15 billion and upwards to $17.5 billion, but the figure of almost $8 billion from the Florida Office of Insurance Regulation is based on claim amounts agreed upon and with 14% of claims currently filed still, open the total is destined to rise further.
Over 900,000 claims have now been filed in Florida and according to sources issues such as assignment of benefits (AOB) are now beginning to become more evident and in some cases causing claims inflation.
It’s entirely possible that the later claims are settled, the higher the amounts claimed for will be, which means the total may rise a little faster from here on. It’s perhaps noteworthy that Miami Dade county is the location where claims appear the slowest to settle at this time.
Also likely to accelerate the total is the fact that only 52% of commercial property claims from hurricane Irma have been settled so far.
However, the figure from the Florida regulator appears unlikely to reach the industry loss levels reported, suggesting a portion of the insurance and reinsurance loss is going unreported to the regulator through its data collection methods.
There has been significant discussion about the gap between actual claims and estimated claims for hurricane Irma, with reinsurance and retrocession usage perhaps clouding the reporting of claims in some cases.
Adding to the hurricane Irma claims toll, the French Insurance Federation has reported that claims in the Caribbean due to Irma are expected to now reach $2.26 billion, up significantly from its earlier estimate of around $1 billion, according to Reuters.
Around EUR 500 million ($620 million) has been paid out in the Caribbean already, the FFA said, with the majority of the claims coming from the Caribbean islands of Saint Martin and Saint Barthelemy.
Many reinsurance providers have already paid their claims to insurers for the losses caused by hurricane Irma, as have many of the retrocessionaires. This includes ILS funds and third-party capital providers.