The cost of insurance claims paid following hurricane Michael’s impacts in Florida has risen by another almost 15% in just one week, nearing $3 billion, according to updated claims information and data from the state insurance regulator.
The data is based on actual claims information filed by insurers operating in Florida, that has been collected and analysed by the state regulator, the Florida Office of Insurance Regulation (FLOIR).
A week ago the total only sat at just under $2.6 billion, but has risen to reach almost $3 billion, as of Friday 9th November, an increase of almost 15% in just one week days.
Over the last week the number of claims filed has only risen by just over 3% though, to 119,160, showing that claims are being closed down quicker than they are coming in, which will provide some comfort to insurance and reinsurance markets.
At the same time the percentage of claims closed has risen to 45.9%, up from the 36.5% a week earlier, showing that claims assessments are being finalised rapidly in order to reduce the open claims count from hurricane Michael.
This continues to occur at a faster rate than was seen in 2017 after hurricane Irma, a reflection of the greater availability of claims assessors helping insurers to respond and review claims much faster, than when both Harvey and Irma were being assessed at the same time.
The number of hurricane Michael insurance claims closed and paid out has risen rapidly again in the last week, reaching 45,006 claims closed and paid to claimants, up by 33% on a week earlier when this figure stood at 33,859.
Now, 42.4% of residential property insurance claims from hurricane Michael have been closed down, an increase on last weeks roughly 32%, while 16.4% of commercial property claims have also been closed down at this stage.
Commercial property claims continue to move along more slowly, but this is to be expected as these often large and complex property insurance claims can take time to be assessed and settled.
The average cost per claim paid out has dropped further in the last week to around $65,000 per claim, from the almost $77,000 per claim we reported a week ago.
Given the assumption that roughly 50% to 60% of claims filed from hurricane Michael will get paid out, based on recent Florida hurricane experience, the expectation remains for something from $4 billion to closer to the market loss estimate low-end of around $6 billion, as the final tally from the FLOIR.
The FLOIR reported claim figures are always well below the industry loss experience from hurricanes, as they do not tend to capture all exposed policy claims among the global re/insurance players.
The expectation continues to be that reinsurance firms will pay for a significant proportion of the losses from hurricane Michael, with third-party capital, perhaps some quota shares and sidecars, as well as certain ILS funds also taking their share.
The daily data calls by the regulator have now finished and the regulator has said that it will now move to a mostly weekly schedule, aside from holidays, to report on the development of claims from hurricane Michael through into 2019.