Catastrophe modeling firm AIR Worldwide has estimated combined insured losses for Hurricane Irma for the US and selected islands in the Caribbean to be between US$20 billion and $65 billion. For the US, AIR's estimated industry insured losses resulting from Hurricane Irma's wind and storm surge range from $15 billion to $50 billion.
AIR Worldwide says in a statement that these estimates are based on the National Hurricane Centre's Friday, 8 September, 5:00 p.m. EDT Saturday forecast advisory for Irma. Should the forecast track shift eastward and pass closer to Miami, US losses could exceed $100 billion.
In addition, AIR Worldwide estimates property losses from the flooding in Texas caused by Hurricane Harvey's record-breaking rainfall to be between $65 billion and $75 billion. These figures include damage to all properties eligible for coverage regardless of whether they are actually insured and without any application of deductibles or limits. Note that these estimates do not include losses from Harvey's winds or storm surge.
Meanwhile, Moody's says that global reinsurance prices are likely to fall by up to 5% when contracts are renewed in January 2018, though heavy losses from Hurricane Irma could halt those declines.
In a new report, S&P says that despite the strong capitalisation of the global insurance and reinsurance sector, Irma could test the resolve of alternative reinsurance capital in the property catastrophe space.
Hardeep Manku, an S&P Global credit analyst, said: “Irma will likely stress-test not only the re/insurers but also the staying power of third-party capital.”
At the same time, global reinsurance giant Munich Re notes that the current natural catastrophes in the USA and India demonstrate all too painfully the significant gap in cover for natural hazard losses.
In a statement, Munich Re said: “...natural catastrophe losses remain largely uninsured worldwide – even in highly developed markets. Although we do not know the exact level of losses from Harvey and the severe monsoon flooding in India, it is already clear that there is a considerable gap between economic losses suffered and the amount covered by insurance.”