The hurricane Matthew insurance or reinsurance claims loss has now reached $606 million, according to the latest from the Florida Office of Insurance Regulation. With over 57% of claims filed still open the total can be expected to rise further, with the remaining claims potentially able to add as much as $800m to the total.
For the second week running the rate of increase of the loss from hurricane Matthew claims has risen by under one hundred million dollars.
The first update from the regulator had shown that hurricane Matthew losses from insurance claims filed hit $218 million by the 12th October, rose strongly to $454 million of insurance claims filed by Friday 14th of October, but then slowed to reach $549 million by the afternoon of Friday 21st October.
That slow rate of increase continued, with only another $57 million added by the afternoon of the 28th October and the total claims bill sitting at $606 million at that point in time.
Almost 43% of the 100,589 claims filed so far have been closed, leaving a 57,605 claims left to be closed as of last Friday.
So far, of those claims closed, almost 51% have resulted in a payout of some description, which based on the $606 million total gives an average claims cost of just under $28,000.
If 50% or more of the remaining 57,650 claims to be closed resulted in a similar average claims cost, another $800 million could be added and the total insurance loss for Florida could reach somewhere around the $1.4 billion mark. Unscientific we know, but it gives a sense of the scale of the insurance and reinsurance losses yet to be calculated in the state.
The expectation remains that a significant proportion of losses from hurricane Matthew will fall to reinsurance capital providers, including capital market investors through some ILS funds, collateralised reinsurance covers and also some reinsurance sidecars.
So the good news is that claims are being dealt with at a reasonable speed still, with more than 10,000 closed in just the last week. The 57,605 left to resolve could become increasingly complex, as more complex claims tend to take more time and these can often also result in a larger insurance cost than those which are more easily settled and closed.