The estimate of insured losses from the impacts of hurricane Michael, based on claims paid data collected from insurers by the Florida state insurance regulator, has now risen to more than $4 billion, suggesting other industry loss estimates are likely to creep higher as well.
The hurricane Michael claims data is based on filed by insurers that operate in Florida, which has been collected and analysed by the state regulator, the Florida Office of Insurance Regulation (FLOIR).
As of Friday 16th November the total had risen to $3.43 billion, having increased steadily over the weeks since the storm struck.
But now, as of Friday 30th November, the total insured loss estimate has risen by another 17% to just over $4.01 billion.
Over the two weeks since the last insured loss and claims data update, the FLOIR says that the number of claims filed has risen by another 4%, to 129,876.
Encouragingly though, the percentage of claims closed has risen to 63.4%, up from the 55.3% reported two weeks earlier.
Still, there appears slow progress on commercial insurance claims from hurricane Michael, though, as only 16.9% of commercial property claims have been closed, although this has at least risen in the last fortnight.
Residential property claims are now 64.7% closed, up from the last count and showing good progress being made here.
Overall though there is a lot of work to do on the commercial and business interruption side of the claims process, which is where the most claims still have to be assessed and finalised after hurricane Michael.
The fact that the FLOIR loss estimate has now passed $4 billion does suggest that insurance, reinsurance and ILS fund market interests should expect the other providers of industry loss data to increase their figures in weeks to come.
Typically, the FLOIR which only surveys Florida domestic insurers and a handful of others operating in the state, produces industry loss estimates of insured claims paid that are around half the level reported by the widely used third-party loss data aggregators.
Right now the FLOIR’s estimate sits at a level that would suggest that the majority of third-party loss data aggregators are going to end up increasing their estimates at the next updates, which will have a bearing on reinsurance and ILS players.
As we explained recently here, the market fears the development of an Irma-like loss creep with future updates to estimates for hurricane Michael and expectations for the eventual industry-wide total have been rising.
The fact the FLOIR data has risen to over $4 billion, which is almost 60% of some other recognised estimates, suggests that the total has further to rise across all provides of loss data and as a result the insurance and reinsurance industry tally may be higher than anticipated.
As we also explained this morning, insurance giant Chubb has said that its losses from hurricane Michael are likely to settle towards the upper end of its initial estimates.
It seems most in the market now expect losses from the hurricane will be higher than at first anticipated and some have even suggested the loss could reach double-digit billions, perhaps as high as $12 billion.
There is some way to go for that to happen, but with the FLOIR planning to keep surveying insurers claims data through into January and as the percentage of commercial claims closed remains so low, it does suggest the loss from hurricane Michael will keep creeping higher.