2020 Atlantic hurricane season

Hurricane Laura related industry loss estimates are coming thick and fast today, with catastrophe risk modellers Karen Clark & Company saying to expect a total of close to $9 billion, while AIR Worldwide has said up to $8 billion for onshore property losses only.

According to industry sources, catastrophe risk modeller AIR Worldwide’s preliminary estimate of insurance and reinsurance market losses from hurricane Laura was pegged in a range from $4.8 billion to as high as $9.2 billion.

Hurricane Laura’s impacts wind and storm surge impacts in Texas and Louisiana are estimated to have caused insured losses of between $8 billion and $12 billion, according to CoreLogic.

Hurricane Laura has now been downgraded to a tropical depression as it moves over Arkansas but it has taken more than 24 hours from landfall for its sustained winds to drop below storm strength, with the significant footprint of the large storm likely to make damage assessment take time.

While hurricane Laura was intensifying rapidly on its path towards the Gulf Coast, insurtech firm Tremor Technologies ran a series of industry loss warranty (ILW) auctions, but no trades were made as the market assumed the loss would not be significant enough to warrant the added coverage.

Insurance and reinsurance industry losses from hurricane Laura’s onslaught of the Louisiana and Texas Gulf Coast region today are expected to be manageable for the industry, despite the intensity of the storm, analysts have said.

A number of the major property and casualty insurers that are seen as most exposed to hurricane Laura’s impacts on the Gulf Coast region could tap into their reinsurance programs, should the major hurricane prove particularly impactful.

According to our market sources, secondary market trading of catastrophe bonds under the approach of hurricane Laura was “relatively light” by comparison to other major hurricane threats, perhaps suggesting that the uncertainty in the forecast cone made it more attractive to hold onto certain positions.

Hurricane Laura has made landfall in the last hour as an extremely dangerous and large Category 4 hurricane with 150 mph sustained winds, near Cameron, Louisiana, around 30 miles SSW of Lake Charles.

Hurricane Laura analogue storms from the past, so major category 3 to 4 hurricane landfalls that hit similar areas of the Louisiana/Texas border region, show a $0.8 billion to $5.9 billion range of insurance industry losses, according to modelling by RMS.