Hurricane Idalia loss high single-digit to low double-digit billions: Twelve Capital

Early indications are that the insurance and reinsurance industry loss from hurricane Idalia is estimated to be in a range from the high single-digit billions of US dollars, to low double-digit billions, catastrophe bond and ILS investment manager Twelve Capital has said today.

At this level of insurance industry loss, the ILS investment manager says, “We do not expect any direct impact to any Twelve Capital positions from this event.”

Twelve Capital’s analysis of the storm based on the indications available to it so far, overlaps the $3 billion to $9 billion industry loss estimate range we discussed earlier today.

The investment manager notes that, “This is an ongoing event there is uncertainty around the final loss number, and who may be impacted. This will be analysed and monitored going forward.”

Twelve Capital also noted that these levels of industry loss, “Might of course add to the aggregate erosion of a number of Cat Bonds covering various perils over an annual risk period.”

The view of the insurance-linked securities (ILS) investment manager has not changed significantly post-Idalia landfall, it seems.

Yesterday, Twelve Capital’s Head of Cat Bonds Florian Steiger commented on hurricane Idalia’s approach to Florida, saying that, “While the event is likely to incur multi-billion-dollar losses for the insurance sector, current analysis suggests that most cat bonds should not be impacted by this event.”

Low double-digit billions, so $10 billion or above, is not unimaginable, if Florida’s inflation and litigation issues were to manifest through the claims process of hurricane Idalia, or if the insured impacts in states such as Georgia and South Carolina takes the ultimate industry loss higher.

The higher the industry loss was, the greater a proportion of it would be expected to fall to reinsurance capital, although still it would be a largely primary market loss event.