The dollar amount of insurance claims filed and calculated after hurricane Irma jumped 57% in just a few days, now passing $3 billion and with almost 500,000 claims now filed, according to the Florida Office of Insurance Regulation.
Hurricane Irma’s impact on the insurance and reinsurance market is becoming clearer, as industry loss estimate ranges have narrowed towards a figure of around $25 billion to $30 billion for the United States, with another $10 to $20 billion from the Caribbean.
The majority of the U.S. industry loss from hurricane Irma will be in Florida, given the storms strongest winds and highest surge impacted the state directly.
At 4pm local time on the 18th September the reported insurance claims figure stood at 335,000 claims filed, 4.5% of claims closed and a total estimated cost of $1.955 billion.
Now, as of 11.25am local time on the 21st September, the number of claims filed has jumped to almost near 500,000, with 9.3% closed and an estimated insured cost of $3.076 billion.
It’s safe to expect that the number of claims filed will continue to rise, bringing new claims to be assessed.
In terms of claims closed, the pace is being set by lines of business other than property related. Looking just at property claims, the percentage closed is just under 5%. Additionally, business interruption claims are only 7.5% closed.
Commercial and rental property claims look particularly slow to close at this stage, which suggests the toll will keep rising as these can be among the more expensive claims.
A lack of insurance adjusters has also been reported in Florida, as well as steep increases in adjuster day rates which will ultimately increase the loss adjustment expenses toll, much of which will be passed onto reinsurance.
With further for the financial cost of the claims reported by the regulator to run, hurricane Irma’s has far surpassed the total claims from hurricane Matthew last year already, which only reached $1.2 billion from just under 120,000 claims filed.
Interestingly, the regulator said that many insurers had claimed trade secret protection of their Hurricane Irma claims data, but after a request the data has now been made available and so the reporting can be more granular at a county level.
The figures released by the regulator are always lower than the industry loss estimates and post-loss calculations the sector provides, as they do not include the full expenses associated with a loss event, or industrial and other large claims. So we should not expect the regulator’s total to reach anywhere near as high as the industry estimates predict, but it does provide a good approximation of the impact and data on the counties most affected by loss.
The data also provide valuable insight into how complex claims are and how long they take to close down and settle.
The lions share of the claims filed due to hurricane Irma will end up paid for with the help of reinsurance capital, with ILS and alternative capital markets expected to take a reasonable share of both reinsurance and retrocession claims
You can see the full data on hurricane Irma claims from the Florida Office of Insurance Regulation here.