Hawaiian wildfires will ring up $1 billion insurance bill: Moody’s

Hawaiian wildfires on the island of Maui likely rendered at least $1 billion in insured losses in what will prove “among the most costly catastrophes in the state's history,” analysts at  Moody's have claimed.

“Given the damage assessment and Lahaina's relatively high $1.5 million average single-family home value, we estimate insured losses will be at least $1 billion,” Moody's said.

Inflation, construction costs and construction capacity may bring wildcards into the eventual claims calculus, Moody's warns.

Hawaii traditionally suffers elevated reconstruction costs on the need to import most construction materials to the islands.

Maui will likely have to import labour as well, Moody's notes. Those factors could play heavily into the existent stories on inflation, labour shortages and supply chain issues.

If those tight rebuilding conditions create delays, living expense claims could come under intense pressure, Moody's warns.

Major national carriers should be able to withstand the pending claims crunch given the low weighting of Hawaii in their portfolios, Moody's noted.

State Farm, nearly three times its next closest rival by direct written premium, takes only 1% of its homeowner premium from the state. Allstate, USAA and Liberty Mutual, the state's #3, 4 and 5, are closer to 0%, Moody’s data showed. The state’s #2 player is a Hawaii-focused unit of Tokio Marine.

The Maui fires, underway since Tuesday, August 8, were fanned by high speed wind gusts upwards of 60 mph as the islands were trapped between a high pressure system to the north and Hurricane Dora to the south.

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