Hurricane Isaias insurance industry loss estimated in $2bn – $4bn range: Euler ILS Partners

Euler ILS Partners, the specialist Swiss insurance-linked securities (ILS) investment manager, has placed an initial insurance industry loss estimate for recent hurricane Isaias in the range of $2 billion to $4 billion, noting there is the potential for the storm’s losses to add to aggregate structures.

Euler ILS Partners explained that there is a good deal of complexity in the loss assessment process, given much of the damage occurred from localised atmospheric turbulence.

Hurricane Isaias made landfall close to Destin, Florida early on Saturday morning local time, carrying Category 2 sustained winds of 105 mph and higher gusts.

As we reported at the time, market sources and reinsurance broker reports all pointed to pre-landfall estimates in the low to mid-single digit billions of dollars.

In a post-landfall report on the event we’ve seen, Euler ILS Partners explained and noted some complexity with the loss estimation process early after the hurricane, “We currently estimate insured losses at USD 2–4 billion. As is typical following a major hurricane landfall, uncertainty remains elevated in the initial post-event period, and industry loss estimates may be revised significantly as additional information becomes available.

“Loss assessment is particularly challenging because most damage resulted from complex, highly localised atmospheric turbulence. In addition, heavy rainfall across the Southeast before landfall contributed to large numbers of trees falling onto roofs over a wide area.”

The specialist ILS investment manager also stated, “Euler is actively monitoring the event and reviewing portfolio exposures. Current analysis indicates no impact on the portfolio. However, the insured losses may add to aggregate structures.”

Euler ILS Partners also explained that its analysis of the hurricane has been supported by the use of its recently launched Global Alert System, a tool developed in-house and in operation since June to provide “hurricane and typhoon forecasts up to 16 days ahead, earthquake and hurricane footprints at street-level resolution, and real-time alerts for earthquakes, tsunamis, wildfires, floods, volcanic eruptions and ash clouds.”

Other early loss estimates are now coming in for hurricane Isaias as well.

Accuweather said the expect the hurricane will result in an, “estimated $16-20 billion in total damage and economic loss across the Gulf and the eastern United States.”

Meanwhile, Cotality (formerly CoreLogic), has estimated that insured losses from wind and storm surge from hurricane Isaias will be in the $2 billion to $3 billion range, with the majority of losses expected to be located in the Florida Panhandle and southern Alabama.