$25–$35B Insured Losses From Hurricane Ida

September 7, 2021

RMS estimates onshore and offshore U.S. insured losses from Hurricane Ida in the Gulf of Mexico to be between $25 billion and $35 billion, and with the island being home to many of the world’s leading re/insurers, Bermuda domiciled companies can be expected to pay out many of the claims.

The company said, “RMS, the world’s leading catastrophe risk solutions company, estimates onshore and offshore U.S. insured losses from Hurricane Ida in the Gulf of Mexico to be between US$25 and US$35 billion. The estimate includes losses to the National Flood Insurance Program [NFIP] in the four impacted Gulf Coast states [Alabama, Florida, Louisiana and Mississippi] in the range of US$2.3–$4 billion.

“This estimate includes wind, storm surge, and inland flood losses across only the impacted Gulf states in the landfall region — Alabama, Florida, Louisiana and Mississippi — based on analysis of RMS ensemble footprints in Version 21 of the RMS North Atlantic Hurricane Models and estimates from the RMS U.S. Inland Flood HD Model.

“RMS ensemble footprints are reconstructions of Ida’s hazard that capture the uncertainties surrounding observed winds and storm surge. This estimate excludes wind and inland flooding impacts in Ohio Valley, Mid-Atlantic, and Northeast U.S. regions, which will be communicated in the coming days once the full extent of damage is known.

“Ida was truly a multi-faceted event in terms of hazard and loss impacts. RMS virtual reconnaissance efforts and analysis of aerial imagery show widespread wind and water-related damage in Louisiana and neighboring Gulf Coast states, including many severe or total structural losses.

“From a wind perspective, this storm was a design level event, where observed wind speeds often exceeded speeds that buildings have been designed to withstand, particularly in the hardest hit areas in southern Louisiana. Many areas impacted by Ida’s winds were also impacted by storm surge, precipitation-induced flooding, and the hurricane events of 2020. In these instances, loss attribution and differentiation may become more complex, leading to longer claims settlement periods,” said Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models.

“Losses reflect property damage and business interruption to residential, commercial, automobile, industrial, infrastructure, marine cargo and specie, watercraft, and other speciality lines of business, along with post-event loss amplification [PLA] and non-modeled sources of loss.

“Hurricane Ida was the ninth named storm of the 2021 North Atlantic hurricane season, the fourth hurricane, and the fifth named storm to make landfall in the U.S. this season. Ida was also the fourth hurricane to make landfall in Louisiana since 2020, following Hurricanes’ Laura, Delta, and Zeta. Over two months still remain in the 2021 North Atlantic hurricane season, officially ending on November 30.

“RMS industry loss estimates for landfalling U.S. hurricanes are comprehensive, reflecting modeled and non-modeled impacts from all major drivers of damage, including wind, storm surge, and inland flooding.”

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