Hurricane Idalia private insurance loss estimated just $2.2bn by KCC

The first post-landfall insurance industry loss estimate for hurricane Idalia has now been revealed and Karen Clark and Company have estimated the wind and surge industry loss at just $2.2 billion.

It’s even lower than the bottom-end of the majority of estimates that were seen pre-landfall and while hurricane Idalia’s impacts were occurring.

As we had reported, the range most were talking about seemed to be between $3 billion and $9 billion of potential insurance and reinsurance market losses from the hurricane, but with most pointing to the lower-half of that range as most likely.

But now, the first post-landfall loss estimate has come out below all of those earlier ones, signalling a lower burden for the insurance industry is likely, with minimal losses likely for reinsurance or ILS interests, if the final loss isn’t too far from this estimate.

Catastrophe risk modelling specialist Karen Clark and Company said, “Based on the high-resolution KCC Caribbean and US Hurricane Reference Models, KCC estimates that the privately insured loss from Hurricane Idalia will be close to $2.2 billion, with less than $5 million in wind damage in the Caribbean and the rest from wind and storm surge losses in the US.

“This estimate includes the privately insured damage to residential, commercial, and industrial properties, as well as automobiles. It does not include boats, offshore properties, or NFIP losses.”

The majority of the loss is expected to be from wind damage, with KCC saying that is estimated at around $2 billion.

Storm surge insured impacts are expected to be far lower, at just $210 million.

At such a low industry loss level, it would assure the insurance-linked securities (ILS) market that exposure would be minimal to almost non-existent from hurricane Idalia.

While, for the broader reinsurance industry, it would suggest the vast majority of the industry loss would be retained in the private insurance market.

KCC said that the location of landfall of major hurricane Idalia has been key in minimising the insurance industry loss potential from the storm.