Hurricane Helene insured losses anywhere from mid-single to even double-digit billions: RBC

According to analysts at RBC Capital Markets, given the wide-reaching impacts from hurricane Helene running from its landfall in Florida right the way through to catastrophic flooding in North Carolina, the eventual insurance market loss could even run into the double-digit billions of dollars.

“Given what happened well after landfall, this storm looks worse than many initial impressions late Friday morning. The question is how much will insurance cover?,” the RBC analysts explain.

They expect that Helene will take the total United States losses from hurricanes so far in 2024 well into the double-digit billions, with between $5 billion to $8.5 billion expected from the three US hurricane landfalls prior to Helene.

Commenting on Helene only, the RBC Capital Markets analyst team state, “The economic damages from Helene look to be considerable (we would think into the tens of billions) but we expect that the majority of overall losses won’t be covered by insurance since they are flood related.

“Most homeowners’ policies don’t cover flood damage and we don’t believe that most residents in impacted areas had flood coverage.

“Still, the flooding was widespread enough that some did have flood coverage (particularly in Florida) and we expect this to be a notable loss event for the National Flood Insurance Program (NFIP).”

Going on to add, “Where are the claims besides homeowners and property damage? One of the main sources of claims will be auto related since flooding is typically covered under a comprehensive auto policy. Likewise, various commercial policies could provide coverage through flood damage, business interruption (driven by extended power outages and road closures) as well as commercial auto flooding. There also could be some reinsurance losses (particularly related to the NFIP).”

More loss estimates are expected to come from risk modelling specialists soon, so far the only official post-landfall estimate was the one from CoreLogic putting out an initial estimate that suggests $3 billion to $5 billion of private market insured losses for wind/storm surge, and property losses in Florida and Georgia.

But, taking into account the full damage footprint from hurricane Helene and the rainfall related flooding from its extratropical transition to the north, the analysts believe double-digit billions are not out of the question.

“We think insured losses could range anywhere from mid-single-digit billions to even double-digit billions but it could take weeks to sort out claims exposure,” the RBC Capital Markets team stated.

There remains significant uncertainty over the eventual insurance market bill from Helene, not least due to the extensive and very damaging flooding seen across the storm’s path, as we explained in our article on the NFIP’s reinsurance and cat bonds starting to get some focus from the industry today.

There are going to be complications due to the wind vs water question, the level of private market flood insurance coverage at-risk, the initial landfall storm surge flooding and its impact to the NFIP, as well as the NFIP’s claims burden from floods further north, so defining a private insurance and reinsurance market loss will be a challenge and possibly lengthy process for Helene.

Also read:

– Florida reinsurance dependency in focus after Helene, with $5bn+ loss expected: AM Best.
– FEMA’s NFIP reinsurance & cat bonds in focus after catastrophic flooding from Helene.
– Hurricane Helene private insurance loss seen mid-to-high single-digit billions: Bowen, Gallagher Re.
– Hurricane Helene economic loss in $20bn – $34bn range: Moody’s Analytics.
– 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.