Preliminary data from CoreLogic shows that properties with a reconstruction value of almost $3.7 billion were exposed to the tornado outbreak at the weekend, with $2.9 billion in Kentucky alone.
As a result, the company said yesterday that insurance and reinsurance market losses would be in the billions, with the majority in Kentucky.
This aligns with an early insured loss estimate from Karen Clark & Company, who yesterday pegged the total at around the $3 billion mark.
CoreLogic explained that, “Kentucky had 11,762 residential structures impacted and likely destroyed, with a total reconstruction value of $2.9B.
“This valuation, and the values listed in the table below, are for the structure only. A homeowners insurance policy includes contents and additional living expense – so a full loss payout on an insurance policy could be double the structure reconstruction cost.”
Add in the commercial insurance impacts, to businesses, factories, warehouses and other facilities damaged by the tornadoes and severe convective storms and it’s easy to see the eventual insurance and reinsurance market loss rising.
After Kentucky, with its $2.9 billion of reconstruction costs exposed, Tennessee is next with $455 million of exposed construction value.
CoreLogic noted that December is late in the year for such tornado outbreaks, but that 2021 tornado incidence is now approaching the 3-year trailing average of annual tornado occurrences.
“The event this weekend reminds us it is not the frequency of events in a year that drives the loss, but the intensity and the location of the event that drive the loss,” the company explained.
Also read:
– Significant tornado outbreak damages multiple U.S. states.
– Weekend tornado & storm losses to run into billions of dollars.
– Tornadoes to affect some aggregate cat bonds: Plenum.
– Tornado impact to ILS investors cannot be ruled out: Twelve Capital.
– US tornado toll likened to $7bn industry loss from 2020 Derecho.
– Tornadoes a multi-billion loss, a “limited portion” for reinsurance: Aon.
– US tornado & storm outbreak estimated a $3bn insured loss by KCC.
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