The private insurance and reinsurance market is forecast to face an industry loss of up to $27 billion from the impacts of hurricane Irma to property, according to risk modelling specialists Corelogic, with up to $19 billion from wind damage and up to $8 billion from commercial property flooding.
Corelogic puts the total economic property loss, for both residential and commercial properties, resulting from both flood and wind damage, at between $42.5 billion and $65 billion.
Wind damage to both residential and commercial properties is estimated to have caused an insurance and reinsurance market loss in a range from $13.5 billion to $19 billion, with $11 billion to $15 billion representing residential property losses.
Another $2.5 billion to $4 billion is estimated as the commercial property wind damage from hurricane Irma, while commercial property insurers are also expected to pay $4 billion to $8 billion for flooding damage as well.
Flood losses to residential properties are largely uninsured and what is insured mostly falls to the National Flood Insurance Program (NFIP). Corelogic estimates that residential flood damage from Irma will cost $25 billion to $38 billion in total. Of this insured residential flood loss is estimated at $5 billion to $8 billion.
At $5 billion to $8 billion the NFIP’s bill from hurricane Irma would be enough to eat into the reinsurance layer, if it isn’t fully exhausted already by hurricane Harvey and if the NFIP can reinstate it for the second hurricane related flooding event.
AIR Worldwide put its estimate of insurance and reinsurance industry losses from hurricane Irma at a reduced $32 billion to $50 billion, with $25 billion to $35 billion in the United States, in its latest update.
So Corelogic’s estimate comes in at the lower-end of AIR’s, which suggests we could see some lowering of other estimates, or at least narrowing of their ranges, in days to come.
However, it should be noted that Corelogic’s estimate is property related only and AIR and other risk modellers include some other classes of business, so estimates now may not reduce all that much further.