Catastrophe risk modelling firm RMS has said that it does not believe that the insurance and reinsurance industry will face any more than $500 million of losses from recent hurricane Nate’s wind and coastal flooding on the U.S. Gulf Coast.
Nate struck the Gulf Coast as a strong Category 1 hurricane but the impacts from the storm are expected to be minor compared to the other recent hurricanes.
In total, RMS estimates that this year’s hurricane season has so far caused between $75 billion and $120 billion of losses for the insurance and reinsurance industry, but Nate will be a minor component of the total bill.
“RMS’ industry loss estimate is expected to be lower than the losses projected prior to Nate’s landfall. Forecasts that projected the storm to strengthen to Category 2 intensity did not materialize and Nate ultimately made two landfalls as a Category 1 hurricane. None of the wind measurement stations analyzed by RMS recorded hurricane-force wind speeds at any point during the storm’s passage,” commented Tom Sabbatelli, senior product manager for RMS’ North Atlantic Hurricane Models.
RMS’ estimate of up to $500 million of losses from hurricane Nate is based on property damage and business interruption from wind and coastal flooding to residential, commercial, industrial, and automobile lines of insurance business. Coastal flood losses include coverage leakage as well.
Inland flooding is only expected to contribute a minimal amount to the total insurance and reinsurance industry loss, so is not included in RMS’ estimate. National Flood Insurance Program are also not included, RMS said.