Hurricane Hermine not exceeding $400M in insured losses
Insured losses associated with the wind and coastal flooding from Hurricane Hermine will not exceed $400 million, according to estimates by catastrophe risk management firm RMS.
The figure takes into consideration property damage and business interruption caused by wind and coastal flooding to residential, commercial, industrial properties, and auto lines of business.
Hurricane Hermine hit Florida in early September killing one person, causing severe damage and knocking out power to nearly 300,000 homes and businesses, according to BBC News.
RMS estimates that 60 to 70 percent of the total insured loss is attributed to residential insured losses.
The calculations for this loss are based on RMS hazard reconstructions of Hermine’s windfield and storm surge using version 16.0 of the RMS North Atlantic Hurricane Models.
From this, it shows that approximately 30 percent on average of the event loss is associated with coastal flooding, including coverage leakage, in addition to an escalation in claims severity for wind-only policies in situations where wind and water hazards co-exist in residential lines of business.
Tom Sabbatelli, hurricane modeller at RMS, said: “Hermine produced damage within the expectations of a category 1 hurricane and RMS analysis shows that this event won’t severely impact the insurance industry. Although Hermine was the first hurricane to make landfall in Florida in eleven years, it did not end Florida’s drought of major hurricane (category 3-5) landfalls.”
RMS said that the estimate does not include losses from the National Flood Insurance Program, and neither losses from inland flooding, although they are expected to be a minimal contribution to the total insurance industry loss.
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