Hurricane Helene insured loss estimate now $10.5bn – $17.5bn including NFIP: CoreLogic

CoreLogic has now updated its insurance market loss estimate for hurricane Helene to include losses to the National Flood Insurance Program (NFIP), now putting the total in a range from $10.5 billion to as much as $17.5 billion.

Initially, CoreLogic had estimated insured private market property losses from hurricane Helene’s winds and storm surge across the US states of Florida and Georgia would be between $3 billion and $5 billion.

In its latest update, the company has expanded the impact reach to includes losses suffered across 16 states.

As a result, the wind only private insurance market loss is now put in a range from $4.5 billion to $6.5 billion.

Adding to the private insured losses CoreLogic now breaks out flood policies, saying it expects another $1.5 billion to $4.5 billion of privately insured flood losses.

On FEMA’s National Flood Insurance Program (NFIP), CoreLogic estimates a loss of between $4.5 billion to $6.5 billion.

Which therefore results in the estimate for the total public and private insurance industry loss being in a range from $10.5 billion to $17.5 billion.

Notably, the estimate for the NFIP suggests that if the upper-end of CoreLogic’s estimate is reached, at up to $6.5 billion, this could bring the FloodSmart Re catastrophe bonds into play.

As we reported last week, on the FloodSmart Re catastrophe bond side, reinsurance coverage for the NFIP would begin to attach at $6 billion thanks to a higher-risk Class C tranche of the $450 million FloodSmart Re Ltd. (Series 2022-1) issuance.

After that, additional FloodSmart Re catastrophe bonds would begin to attach only when the NFIP loss total reached $7 billion.

At the same time, a loss event of $7 billion or greater is required for the NFIP’s traditional reinsurance to attach, at which level it would be a top-4 NFIP flood loss event.

As we also reported last week, there were some nerves beginning to emerge among sources over hurricane Helene’s potential to attach certain reinsurance or insurance-linked securities (ILS) contracts, with the NFIP’s cat bonds among them.

As yet there is no visibility of the claims burden faced by FEMA’s NFIP, after the catastrophic flooding from hurricane Helene that extended from landfall storm surge impacts in Florida right up to devastating rainfall linked flooding in western North Carolina.

On top of the insured losses estimated by CoreLogic, the company has also highlighted the flood insurance protection gap, saying that uninsured flood losses from Helene could be between $20 billion and $30 billion.

“When intense storm surge and flooding events, like Hurricane Helene, reach regions that are infrequently affected by natural hazards, we can expect to see damage to homes without flood insurance coverage. The fact that so much damage was concentrated outside the Special Flood Hazard Areas (SFHAs) makes it challenging to realize the full extent of impact to uninsured homeowners,” explained Jon Schneyer, Director of Catastrophe Response at CoreLogic. “Thankfully FEMA’s NFIP is expected to provide up to $6.5 billion of insurance for the recovery efforts, which will help bring much needed recovery aid to the affected areas.”

Also read:

– Reinsurers (and ILS) can absorb any hurricane Helene losses within earnings: S&P.
– Hurricane Helene private/public insured losses likely at least in higher single-digit billions: Aon.
– Some nerves evident as Helene’s Florida claims outpace Idalia, State Farm’s outpace Ian, & on NFIP.
– Hurricane Helene insurance industry loss estimated close to $6.4bn by KCC.
– Direct cat bond losses still seen unlikely from Helene, but NFIP bonds monitored: Twelve Capital.
– Hurricane Helene floods over 100k buildings, at least 10k to over 5 feet: ICEYE.
– Hurricane Helene insured losses anywhere from mid-single to even double-digit billions: RBC.
– Florida reinsurance dependency in focus after Helene, with $5bn+ loss expected: AM Best.
– FEMA’s NFIP reinsurance & cat bonds in focus after catastrophic flooding from Helene.
– Hurricane Helene private insurance loss seen mid-to-high single-digit billions: Bowen, Gallagher Re.
– Hurricane Helene economic loss in $20bn – $34bn range: Moody’s Analytics.
– Hurricane Helene insured wind/surge property loss in Florida/Georgia initially said $3bn – $5bn: CoreLogic.
– Losses to per-occurrence cat bonds from hurricane Helene currently seen as unlikely: Twelve Capital.
– Hurricane Helene landfall at Cat 4 140mph winds, Tampa Bay sees historic surge flooding.
– Hurricane Helene industry loss seen $3bn to $6bn if Tampa avoided: Gallagher Re.
– Minimal to no cat bond impact expected from hurricane Helene if track unchanged: Plenum.