tropical storm Laura 2020

The onshore and offshore total of insurance and reinsurance market losses from recent hurricane Laura is estimated to be in the double-digit billions, between $10 billion and $15 billion by catastrophe risk modeller RMS.

At current industry loss estimate levels, the impacts to insurance-linked securities (ILS) funds from hurricane Laura is not expected to be significant, with some funds even able to offset the hit with the income their reinsurance and retrocession positions earned them in August.

Industry losses from hurricane Laura are expected to largely fall to primary insurance carriers, but rating agency Fitch says that traditional reinsurance carriers and insurance-linked securities (ILS) players will take a share.

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.