Moody’s estimates insured losses from hurricane Isaias in $2.5bn to $4.5bn range

Moody’s RMS Event Response has now provided an initial estimate of insurance industry losses from recent hurricane Isaias, placing them in a range between $2.5 billion and $4.5 billion.

Moody’s said that its best estimate is $3.5 billion, as you might expect the mid-point of the range and that the estimate represents insured losses from wind, storm surge, and precipitation-induced flooding damages.

Wind damage is the majority of the losses from hurricane Isaias, Moody’s explained, while storm surge, precipitation-induced inland flooding, and the National Flood Insurance Program (NFIP) losses are expected to be only around $250 million of the total.

Moody’s estimate includes insured property damage and business interruption for residential, commercial, industrial, automobile, as well as watercraft lines of business, and it also accounts for sources of post-event loss amplification (PLA).

We can compare Moody’s estimate to others, such as the most recent from Karen Clark & Company (KCC) that estimated the private insurance market loss from wind and storm surge associated with recent hurricane Isaias would be $3 billion.

Verisk gave its initial industry insured loss estimate for Isaias recently, saying that onshore property losses from the storm could reach $2 billion.

In addition, Euler ILS Partners, the specialist Swiss insurance-linked securities (ILS) investment manager, put an initial insurance industry loss estimate for recent hurricane Isaias in the range of $2 billion to $4 billion.

Cotality (formerly CoreLogic), estimated that insured losses from wind and storm surge from hurricane Isaias will be in the $2 billion to $3 billion range, while Gallagher Re said industry losses will fall in the lower end of the low to mid-single-digit billions of dollars range and AM Best said insured loss estimates are expected to be in the low single digit range in billions of dollars.

Moody’s estimate is one of the higher, but still all the estimates top-out at $4.5 billion in range terms, at which level hurricane Isaias is not expected to be a significant reinsurance event, aside from perhaps a few very low layers and any quota share reinsurance participations that are exposed.

Jeff Waters, Director – North Atlantic Hurricane Models, Moody’s, commented: “Hurricane Isaias was yet another example of a storm that intensified quickly over the anomalously warm ocean waters in the Gulf, a region that usually sees higher hurricane activity during El Niño years. Thankfully, the storm encountered strong wind shear as it approached landfall, which disrupted its structure and weakened the wind field considerably. As a result, we expect the overall extent and severity of insured losses from this event to be manageable for the market.”

Raj Vojjala, Managing Director – Modeling and Analytics, Moody’s, said, “Many exposures impacted by Hurricane Isaias were also impacted by recent storms like Hurricanes Sally and Zeta in 2020, and Helene in 2024, which led to widespread roof repairs and replacements. We expect these efforts to have improved the risk profile and structural resilience of the region’s building stock to hurricane winds, especially for an event like Isaias. Nevertheless, a high incidence of treefall-driven roof damage in the affected area and potential roof replacements due to Florida’s 25% roof rule, which can require full replacement of certain roofs when repairs exceed a specified threshold, will drive insured losses in this event.”