Catastrophe risk modelling specialist, CoreLogic, has provided a preliminary insured and uninsured loss estimate from the impacts of hurricane Nate of up to $1.35 billion, with the majority coming from wind damage to residential properties.
The preliminary estimate, which excludes uninsured residential and commercial flood losses, is between $650 million and $1.35 billion, and includes both wind and flood damages to residential and commercial properties. In this range Nate will not have a major impact on reinsurance capital.
Between $500 million and $1 billion of insured losses are related to wind damage for both residential and commercial properties, with between $375 million and $750 million representing residential losses.
Which suggests that between $125 million and $250 million represents commercial insurance losses from wind damage.
According to CoreLogic, the majority of damages from hurricane wind is typically covered by private insurers, with reinsurance likely to take a share, and possibly some insurance-linked securities (ILS) market players.
Of the flood loss, an estimated $100 million to $200 million relates to residential properties, with a further $50 million to $150 million being attributed to commercial flood losses.
As CoreLogic explains, most flood damage from hurricane Nate is expected to be covered by insurance protection, as the low severity of the storm meant flooding was contained within Special Flood Hazard Areas (SFHA), which are mandated by the U.S. Federal Emergency Management Agency (FEMA) to have flood insurance in place.
CoreLogic explains that the flood loss includes storm surge, inland and flash flooding in Alabama, Florida, Louisiana, and Mississippi.
Catastrophe risk modeller RMS said recently it doesn’t expect insured losses from Nate to surpass $500 million, which is $150 million less than the lower end of CoreLogic’s estimate.
Hurricane Nate struck the Gulf Coast as a strong Category 1 storm, but compared to recent hurricanes experienced in the third-quarter, it appears the total loss will be minor.