Hurricane Helene economic loss in $20bn – $34bn range: Moody’s Analytics

The damage price tag from hurricane Helene’s impacts on the United States is expected to fall in a range from $20 billion to as high as $34 billion, with property damage a significant component at $15 billion to $26 billion, Moody’s Analytics has said.

The remainder of the economic loss, $5 billion to $8 billion, is expected to come from a reduction in output, the firm explained.

Moody’s said it is too early for insured loss estimates, but expects one to be released by its Moody’s RMS Event Response unit in the coming weeks.

“A third straight year in which a severe hurricane has slammed Florida’s Gulf Coast reinforces growing concerns about long-term impacts,” write Adam Kamins, senior director of economic research at Moody’s Analytics. “Although climate hazards alone tend not to compel residents to move out of an area, further increases in insurance premiums might. Significant changes in the next year or two are improbable, but the corrosive impact on housing affordability in the Sunshine State looks like an ever-growing risk.

“Based on what is known about the storm so far, there is enough information to produce a preliminary lost output and damage figure.”

The company said that most of the cost is expected to come from milder damage that spans Florida, Georgia, North and South Carolina and includes some major population centers.

Moody’s Analytics likens hurricane Helene to Idalia from 2023, but says its impacts are worse.

“Helene is poised to carry a heftier economic price tag. Unlike Idalia, Helene sustained its Category 4 status long enough to bring higher winds and more severe storm surges to Florida. Tampa and St. Petersburg dealt with record-breaking surges that unleashed significant flooding. A similar story unfolded across much of the northern Gulf Coast and into the eastern panhandle before the storm weakened, sparing Tallahassee from a more severe outcome,” the company said.

Adding, “Another significant difference involves Helene’s size as one of the largest Gulf hurricanes in recent memory. This contributed to its storm surge and set the hurricane up to affect a wider swath of the Southeast after weakening to a tropical storm.

“Combine its reach with a path that puts several major metro areas in the hurricane’s crosshairs, and its economic impact will be significant. Atlanta is the largest inland area on the path, and while fears of Helene remaining at hurricane strength while hitting the metro area did not materialize, significant flooding and wind-related issues are materializing. The Carolinas, where inland flooding is always a concern with major storms, also face a difficult next few days.”

Commenting on the damages from the major hurricane, Moody’s said, “On the property damage side, there is a bit more uncertainty. The storm has been catastrophic in the Big Bend, but less expensive housing and fewer homes keep a lid on the price tag there. Rather, most of the cost will come from milder damage that spans a wide footprint covering four states and including some major population centers. Ultimately, we expect $15 billion to $26 billion in property damage, resulting in a total cost of $20 billion to $34 billion.

“This puts the price tag well above Idalia’s but below storms from earlier this decade like Ian and Ida, which hit more populated areas in Florida and Louisiana, respectively. In all likelihood, Helene’s scale and trajectory will mean that an outsize share of its cost comes from disruption rather than damage.

“Still, a third straight year in which a severe hurricane has slammed Florida’s Gulf Coast reinforces growing concerns about long-term impacts. Although climate hazards alone tend not to compel residents to move out of an area, further increases in insurance premiums might. Significant changes in the next year or two are improbable, but the corrosive impact on housing affordability in the Sunshine State looks like an ever-growing risk.”

Also read:

– Hurricane Helene insured wind/surge property loss in Florida/Georgia initially said $3bn – $5bn: CoreLogic.
– Losses to per-occurrence cat bonds from hurricane Helene currently seen as unlikely: Twelve Capital.
– Hurricane Helene landfall at Cat 4 140mph winds, Tampa Bay sees historic surge flooding.
– Hurricane Helene industry loss seen $3bn to $6bn if Tampa avoided: Gallagher Re.
– Minimal to no cat bond impact expected from hurricane Helene if track unchanged: Plenum.