Hurricane Idalia may hold insured losses to low single digit billions
Hurricane Idalia may pass by without presenting much of a bill to reinsurers while holding the cost to primary carriers to the mid to low single digit billions, an early consensus appeared to indicate.
In the event, Idalia brought a narrow field of hurricane-force winds through a sparsely populated area and a storm surge that might yet peak below the worst of the pre-storm warnings.
“This is not the devastating event that was feared even 24 hours ago,” the senior meteorologist at re/insurance brokerage BMS, Andrew Siffert, said in comment to the aftermath.
BMS “feels comfortable” with cat model estimates in a $3 to 6 billion range and considers that “the lower end of that range is more likely.”
Comments follow reports that Moody’s RMS had put Idalia as a $6.3bn insured loss and that reinsurance broker Gallagher Re was initially telling markets of low to mid-single digit industry losses.
That could put industry losses below the threshold for reinsurer engagement.
“Overall losses should be below most carrier cat programs, so this will not be a reinsurance event as insurance companies retain the losses,” Siffert suggested. “Many factors seem to be coming together to limit overall insurance industry losses.”
A narrow wind field over a sparsely populated landfall region led the list of lucky factors. Live coverage from Siffert's array of preferred storm chasers "do not show a lot of significant damage in the landfall areas."
Taylor county, home to the Keaton Beach landfall epicentre, bears a 2020 population of just 21,796, rendering only 21 persons per square mile (per 8km2). Homes in the region may be below specs now demanded in other cat-prone jurisdictions, BMS noted.
Further south, towards the wealthier and more densely populated Tampa Bay area, wind speeds never broke the 60 mph (97 km/h) threshold.
Electricity is already coming back on line for some. At last measure, 142,764 Florida clients were out of power, well down from figures near 270k shortly after landfall, power grid watcher PowerOutage.us said. But 117,745 clients in the state of Georgia had joined the ranks of the outage-stricken.
Storm surge damage might also have held below worst-case fears. The NHC reported a water level of 6.8 feet above mean higher high water for Cedar Key on the exposed right-hand side of landfall as an approximation. Forecasts had run higher. BMS's Siffert held out hope that peak storm surge readings might have been capped at 9 feet.
Lingering storm surge warnings on the Atlantic coast only ranged upwards of 4 feet (1.3m).
As of 2:00 local time, the storm was centred some 20 miles (30 km) south west of the South Carolina coastal resort town of Myrtle Beach moving northeast along the coast at 21 mph (33 km/h) and bearing maximum sustained wind speeds of 60 mph (95/km/h).
Forecast trajectories show Idalia moving east out to sea. the NHC is advising that Bermuda begin to monitor Idalia's further progress.
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