Swiss Re Insurance-Linked Fund Management

Xactanalysis Insights and PCS

Verisk estimates hurricane Ian loss up to $57bn, warns could breach $60bn


Verisk has come out with its first post-landfall and official estimate of insurance and reinsurance market losses from hurricane Ian, saying that the onshore property insured loss is estimated to be in a range from $42 billion to $57 billion.

Hurricane Ian satellite image of Florida landfallThis industry loss estimate is from Verisk Extreme Event Solutions, so what was AIR Worldwide and includes estimated wind, storm surge, and inland flood losses resulting from Ian’s landfalls in both Florida and South Carolina.

However, Verisk notes that the industry loss estimate excludes certain elements, such as losses to the National Flood Insurance Program and any potential impacts of litigation or social inflation, that it says could cause the total insurance and reinsurance industry loss to exceed $60 billion.

The majority of the industry loss estimate from Verisk is comprised of wind damage at $38 billion to $51 billion.

Storm surge (excluding losses from the NFIP) accounts for $3 billion to $5.5 billion of the loss estimate, and inland flood less than $1 billion, Verisk explained.

Driving home the fact hurricane Ian is a Florida loss event for the insurance, reinsurance and insurance-linked securities (ILS) industry, Verisk said that only around 1 percent of the total industry loss will come from the impacts of Ian’s South Carolina landfall.

Verisk said that its estimate includes losses to onshore residential, commercial, and industrial properties and automobiles for their building, contents, and time element coverage.

It also reflects the impacts of inflation on labor and materials over the past two years, the company said, and factors in demand surge factors as well.

The estimate from Verisk does not include:

  • Losses to inland marine, ocean-going marine cargo and hull, and pleasure boats
  • Loss adjustment expenses
  • Losses exacerbated by litigation, fraudulent assignment of benefits, or social inflation
  • Losses paid out by the National Flood Insurance Program
  • Storm surge leakage losses paid on wind-only policies due to government intervention
  • Losses to uninsured properties
  • Losses to infrastructure
  • Losses from extra-contractual obligations
  • Losses from hazardous waste cleanup, vandalism, or civil commotion, whether directly or indirectly caused by the event
  • Losses resulting from the compromise of existing defenses (e.g., natural and man-made levees)
  • Other non-modeled losses, including those resulting from tornadoes spawned by the storm
  • Losses for U.S. offshore assets and non-U.S. property

Verisk’s estimate compares to that of KCC, which pegged the total at around $63 billion.

Also read:

Swiss Re cat bond index plummets on Hurricane Ian. US Wind down 32%.

Well over $1bn of cat bond mark-downs expected after hurricane Ian.

Hurricane Ian industry loss estimated close to $63bn by KCC.

Plenum says estimated $50bn hurricane Ian to dent its cat bond funds.

Hurricane Ian industry loss estimated up to $40bn by Fitch.

Hurricane Ian to force a reevaluation: Millette, Hudson Structured.

Hurricane Ian to cause Florida indemnity & FloodSmart cat bond losses: Twelve.

Hurricane Ian Florida insured wind & surge losses $28bn – $47bn: CoreLogic.

Hurricane Ian economic loss in Florida around $65bn: RMSI.

Hurricane Ian: A historic hit for Florida, no matter the quantum of loss.

Hurricane Ian to impact cat bond funds. Plenum says hit to be “limited”.

Hurricane Ian to add reinsurance rate momentum, disrupt Florida market: KBW.

A particularly broad cat bond mark-down this Friday?

Cat modeller data hinted at hurricane Ian’s $50bn+ industry loss potential.

Hurricane Ian: Rapid weakening may see losses nearer $32.5b, says KBW.

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis London 2022 - Insurance-linked securities conference in London

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.