Home Insurance Hurricane Ian Private Insurance Market Loss Nearly $63 Billion -KCC

Hurricane Ian Private Insurance Market Loss Nearly $63 Billion -KCC

Hurricane Ian Private Insurance Market Loss Nearly $63 Billion -KCC

Hurricane Ian Private Insurance Market Loss Nearly $63 Billion -KCC

Hurricane Ian Private Insurance Market Loss Nearly $63 Billion -KCC

According to Karen Clark & Company, the effects of major hurricane Ian are anticipated to result in a privately insured loss of about $63 billion, the majority of which will come from the United States.

ALSO, READ Over 1 million Florida Homes At Risk From Hurricane Ian Storm Surge: CoreLogic

Only about $200 million of this damage estimate, according to the disaster risk modeling firm, will come from the Caribbean, which means that the majority of the remaining $63 billion will come from the US, primarily from Florida.

Based on an estimate of insured wind, storm surge, and inland flood losses from major hurricane Ian, the US loss estimate.

Karen Clark & Company (KCC) cautioned that the industry loss will be a particularly complex one for insurance and reinsurance market interests.

Hurricane Ian Private Insurance Market Loss Nearly $63 Billion -KCC

“Hurricane Ian will be a challenging storm for insurers due to the tremendous amount of coastal flooding and the unique nature of the Florida market with respect to a likely high proportion of litigated claims,” KCC explained.

KCC’s US insurance industry loss estimate includes:

  • Insured loss to residential, commercial, and industrial properties and to autos
  • Building, contents, and time element losses
  • Privately insured loss from wind, storm surge, and inland flooding
  • Estimated demand surge
  • Estimated impacts of excess litigation in Florida

ALSO, READ Aurora appoints WTW’s Ian Thomas as Head of Product and Insight

But, the US figure excludes:

  • NFIP losses
  • Boats and offshore properties
  • Uninsured flood losses
  • Uninsured wind losses (e.g. loss under deductibles)

As KCC’s hurricane Ian industry loss estimate does not include any losses due for the National Flood Insurance Program, it does not contemplate potential additional private reinsurance market losses, should the NFIP need to make recoveries from its reinsurance and catastrophe bond tower.

KCC has loaded its estimate for potential litigation, a key issue for Florida’s insurance marketplace and so a possible inflator of claims from hurricane Ian.

Hurricane Ian Private Insurance Market Loss Nearly $63 Billion -KCC

The catastrophe risk modeler said, “KCC experts have analyzed the trends in litigated claims in Florida and other states. While legislative and policy changes should help to reduce the proportion of litigated claims relative to Hurricane Irma, the large proportion of properties with both wind and water damage may induce more litigation. The KCC estimate includes a comparable proportion of excess litigation as occurred in Hurricane Irma.”

KCC also said that, in nominal dollars, Hurricane Ian is anticipated to be the largest hurricane loss in Florida history.

ALSO, READ Weston Insurance Becomes Fifth Florida Insurer to Go Insolvent This Year 2022

KCC estimates that economic losses from hurricane Ian will rise well above $100 billion, including uninsured properties, damage to infrastructure, and other cleanup and recovery costs.

KCC’s estimate of close to $63 billion of private market insured losses from hurricane Ian is the highest estimate seen yet and compares to the estimate of up to $47 billion from CoreLogic.

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