RMS, Verisk Weigh in With Insured-Loss Estimates in Low Billions From Idalia

Moody’s RMS and Verisk on Monday each released insured loss estimates for Hurricane Idalia.

RMS estimated total private market insured losses from Idalia to be between $3 billion and $5 billion, with a best estimate of $3.5 billion. Verisk meanwhile issued an estimate for insured losses to onshore property of between $2.5 billion and $4 billion.

Each firm said the hurricane’s path and ultimate landfall at Florida’s Big Bend reduced the losses despite the storm’s strength. Hurricane Idalia made landfall near Keaton Beach, Florida on the morning of Aug. 30 as a strong Category 3 hurricane. The region is far less populated than other areas along the Gulf Coast.

In comparison, catastrophe modeler Karen Clark & Co. late last week said it expects private insured losses of about $2.2 billion from Idalia.

RMS said its estimate includes insured losses from property damage and business interruption to residential, commercial, industrial, watercraft, and automobile lines of business, and considers sources of post-event loss amplification, inflationary trends, and non-modeled sources of loss. Verisk said its prediction includes losses to onshore residential, commercial and industrial properties and automobiles, as well as the impact of demand surge.

“Manufactured homes constitute a significant portion of the residential inventory in the Big Bend region of Florida where Idalia made landfall,” Verisk said in its statement. “Several manufactured homes in these areas saw massive damage, including loss of roofs, damage to wall siding and near-total destruction due to wind and surge alike, the latter in coastal areas.”

Jeff Waters, staff product manager for North Atlantic hurricane models at RMS said that while “the tight gradient of damaging winds combined with limited exposure and low flood take-up rates in the worst-affected area should reduce the overall level of insured losses,” the modeler expects Idalia to “test Florida reinsurers on the heels of new legislation passed over the last several months to stabilize the market and curb the impacts of social inflation.”

Moody’s RMS added an estimate of about $500 million in losses to the National Flood Insurance Program.

Top photo: Pickup trucks and debris lie strewn in a canal in Horseshoe Beach, Fla., after the passage of Hurricane Idalia, Wednesday, Aug. 30, 2023. (AP Photo/Rebecca Blackwell, File)