RMS estimates $67bn in insured losses from Hurricane Ian

Catastrophe modeller RMS has estimated that the insured loss as a result of Hurricane Ian will reach $67bn. The estimate reflects insured wind, storm surge, and inland flood impacts for the US within a range of $53bn to $74bn. Additionally, the federally backed National Flood Insurance Program (NFIP) could see losses of around $10bn.

  Wind incl. coverage leakage Storm Surge excl. NFIP Inland Flood excl. NFIP Total* Best Estimate
Private Market Insured Loss $46bn – $67bn $6bn-plus $1bn-plus $53bn – $74 bn $67bn

*Losses rounded to nearest billion

The overall industry loss estimate for Ian includes wind and storm surge losses in Florida, South Carolina, North Carolina, Georgia, and Virginia, based on an analysis of ensemble footprints in Version 21 of the RMS North Atlantic Hurricane Models.

The RMS estimate reflects losses from property damage, contents, and business interruption, across residential, commercial, industrial, automobile, infrastructure, watercraft, and other specialty lines.

No details have been released as to how the losses will be divided by insurance sector, although it is to be expected that the vast majority of insured losses will devolve to the property sector (with some on automobile), rather than marine. There was widespread damage to leisure yachts that were caught in port when the hurricane struck, but fuller details are not year available.

Mohsen Rahnama, Chief Risk Modelling Officer at RMS, said that “Ian was a historic and complex event that will reshape the Florida insurance market for years to come. Given the complexity of the event and the multiple drivers of the loss, our ability to deploy multiple RMS field reconnaissance teams to conduct damage assessments throughout Florida, including the heavily affected areas of Fort Myers and Cape Coral along the southwest coast, has been a critical component of our analysis. Their assessments have proved invaluable in helping our modelling teams to reconstruct and validate the extent and severity of Ian’s wind and water impacts, and our assessment of the magnitude of the various drivers of the total industry loss”.

Jeff Waters, Staff Product Manager, Product Management, RMS, said that “aside from property damage, we expect significant losses to automobile and watercraft lines in this event due to fewer evacuations in the worst-affected region”.

In addition to the US, Hurricane Ian also impacted parts of the Caribbean, notably Cuba, with strong winds, heavy rain, and flooding. While Cuba saw severe economic and infrastructure damage in the event across many areas, RMS estimates insured losses in Cuba will be minimal due to low insurance penetration in the region.

Ian made mainland US landfall near Cayo Costa, Florida on Wednesday September 28th as a strong Category 4 hurricane. At landfall it produced sustained winds of 150mph. After traversing slowly over central Florida, it emerged over the Atlantic before making a second landfall near Georgetown, South Carolina on Friday September 30th as a Category 1 hurricane.

The main marine damage would have been around Fort Myers on Florida’s western (Gulf of Mexico) coast.