21 October 2016 Insurance

Matthew will be costliest Atlantic hurricane since Sandy

Insured losses stemming from Hurricane Matthew will be between $1.5 billion and $5 billion for the US, and between $1 billion and $3 billion for the Caribbean, according to estimates by RMS.

RMS said that approximately 70 percent of the estimated US loss is to residential lines, while storm surge-driven coastal flooding is estimated to contribute around 30 percent of the all-lines loss – including coverage leakage and an escalation in claims severity for wind-only policies in situations where wind and water hazards co-exist in residential lines of business.

Only one of the ten RMS event reconstructions generated a US loss in excess of $4 billion. However, the company advises there is still a small possibility that losses could reach as high as $5 billion. The RMS estimate does not include losses to the National Flood Insurance Program (NFIP) or to public buildings and infrastructure.

Both loss estimates include property damage and business interruption, caused by wind and coastal flooding upon residential, commercial, and industrial lines of business. For the US, auto lines of business are also included.

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