Hurricane Delta to cost re/insurers up to $5bn — RMS
Hurricane Delta will cost re/insurers up to $5 billion, including wind, storm surge and inland flooding across Louisiana, Texas, and Mississippi in the US, as well as damages to the offshore platforms in the Gulf of Mexico.
According to catastrophe risk modeler RMS, the total onshore US insured losses from Hurricane Delta are expected to be between $2 billion and $3.5 billion. This is after a 15 percent reduction due to the cumulative impacts of Hurricane Laura, which damaged much of the same region six weeks earlier.
The estimate includes losses to the National Flood Insurance Program (NFIP) of between $200 million and $400 million.
Losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, along with post-event loss amplification (PLA) and non-modeled sources of loss. RMS expects most insured losses will be from residential lines.
In Mexico, RMS estimates insured losses from Delta to be less than $500 million.
Additionally, insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico are expected to be less than $1 billion from wind and wave-driven damages.
Delta was the twenty-fifth named storm of the 2020 North Atlantic hurricane season, the ninth hurricane, and the fifth US landfalling hurricane of this very active season.
“The overlapping nature of Delta and Laura will create a complicated claims management and loss attribution process for the industry," said Jeff Waters, senior product manager of RMS North Atlantic Hurricane Models.
"Using an innovative combination of high-resolution aerial imagery and machine-learning techniques, the modeling teams at RMS assessed the competing impacts of Hurricane Laura on Hurricane Delta losses. We determined that more than half of the impacted postal codes were also impacted by Laura, representing more than 90% of loss in this event. While Delta caused higher than expected damage to many structures due to pre-existing damage from Laura, reduced overall exposure-at-risk in the overlapping region after Laura means losses attributed to Delta will end up being lower than if Laura had never happened.”
