US private market losses for Hurricane Beryl could reach $4.5 billion

US private market losses for Hurricane Beryl could reach $4.5 billion – Moody’s RMS | Insurance Business America

Catastrophe & Flood

US private market losses for Hurricane Beryl could reach $4.5 billion – Moody’s RMS

Wind expected to drive most of these losses

Catastrophe & Flood

By
Kenneth Araullo

Moody’s RMS Event Response estimates that US insured losses from Hurricane Beryl will likely range between $2.5 billion and $4.5 billion.

These losses include wind, storm surge, and precipitation-induced flooding. Losses to the National Flood Insurance Program (NFIP) from this event are estimated to be less than $300 million.

The total insured loss estimates for Hurricane Beryl, including post-event loss amplification and non-modeled sources of loss, are significant. Private market insured losses are estimated to be between $2.5 billion and $4.5 billion, with a best estimate of $3.7 billion.

The wind and storm surge components for this industry-insured loss estimate are based on an analysis of ensemble footprints in Moody’s RMS Version 23 North Atlantic Hurricane Models. The inland flood component of the loss estimate was derived using Version 1.2 of Moody’s RMS US Inland Flood HD Model.

Moody’s RMS US Hurricane and US Private Flood industry exposure databases informed the private market loss estimates, while FEMA’s NFIP policy-in-force data was used for the NFIP loss estimate.

Jeff Waters, director of North Atlantic Hurricane Models at Moody’s, said that Hurricane Beryl was complex and impactful across multiple fronts and regions.

“Estimated losses reflect property damage and business interruption to residential, commercial, industrial, watercraft, and automobile lines of business, and consider sources of post-event loss amplification (PLA) and non-modeled sources of loss,” Waters said.

Raj Vojjala, managing director of model development at Moody’s, remarked on the additional impacts from treefall-related damages, infrastructure washouts, and tornado-related damages, which could exacerbate damage and prolong repairs.

Vojjala also noted that South Texas witnessed notable coverage leakage from inland flood on wind policies after Hurricane Harvey in 2017, and Beryl might produce similar effects to a lesser degree.

Wind is expected to largely drive US private market insured losses from Beryl, though storm surge and inland flood-related losses could contribute significantly in some of the worst-affected Texas counties. Insured wind and NFIP losses will be driven by residential lines, while commercial and automobile lines will drive private market water losses, primarily in Texas.

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