According to a projection from risk modeling software company AIR Worldwide, combined insured losses of $20 billion to $65 billion could have already been created by Hurricane Irma.
The losses and devastation in the hurricane hit areas in the United States and some selected islands in the Caribbean were included in the estimates made by the company. AIR said that losses between $15 billion to $50 billion have been anticipated to be the value of the losses due to the hurricane for the U.S. alone.
A financial wallop along with its human toll is expected to be finally left by the more powerful Irma, compared to Hurricane Harvey, as this latest super storm has brought Florida to a standstill even as the final costs of Hurricane Harvey are still being tallied.
With $2 billion to $4 billion of the total losses expected to fall to private insurance companies, the government will bear the brunt of these losses of the storm amid widespread disaster preparations, analysts expect.
“According to AIR, in Florida, close to 80 percent of the total insured value is located in coastal counties, where the amount and value of exposure has been growing significantly for decades,” the report noted.
AIR however noted that strict codes for hurricane damage have been strictly m maintained since Hurricane Andrew in 1992 in the Miami area which is the Southeast’s most densely populated region.
“As in the case of the 2004 hurricane season, significant damage may be expected to roof covers related to installation and attachment methods,” AIR wrote. “Manufactured homes are vulnerable to significant damage during hurricanes and their performance tends to be a function of age and of the regulations under which the home was constructed and installed.”
the storm was heading toward the state’s west coast toward Tampa even as Irma’s 130 mph wind and heavy rain reached the Florida Keys on Sunday.
“The financial impact on the insurance industry is probably going to be a little bit lower than initially expected. I think what is interesting is the impact on the insurance industry is probably more from the fact that we have now two storms in a relatively short period of time,” Niklaus Hilti, managing director and CEO of Credit Suisse Insurance Linked Strategies, said during a television interview on Monday.
“The hurricane season is not yet over so with Harvey, with Irma, I think we definitely talk of the insurance industry already (seeing) around $60 to $70 billion of insured losses,” he added.
(Adapted from CNBC)