Hurricane Helene privately insured losses estimated $8bn to $14bn by Moody’s RMS

Moody’s RMS Event Response has said that it estimates private market insurance industry losses from hurricane Helene will be in a range from $8 billion to as much as $14 billion, one of the highest estimates seen so far.

The company says its best estimate is for industry losses of $11 billion, while it also anticipates that NFIP flood losses will come in above $2 billion as well.

Wind and storm surge insurance and reinsurance market losses from recent hurricane Helene are estimated to be between $6.7 billion and $12.3 billion.

In addition, privately insured inland flood losses are estimated at between $1.3 billion and $1.7 billion.

As we reported yesterday, CoreLogic updated its insurance market loss estimate for hurricane Helene to include losses to the National Flood Insurance Program (NFIP), now putting the total in a range from $10.5 billion to as much as $17.5 billion.

However, CoreLogic is anticipating the NFIP flood loss reaches to between $4.5 billion to $6.5 billion, which could potentially bring its lowest attaching catastrophe bond into play with the NFIP’s traditional reinsurance also in sight of that.

Karen Clark & Company had estimated private wind and surge losses at close to $6.4 billion.

While Milton is taking all of the focus this week, the rising loss estimates for hurricane Helene are becoming increasingly likely to drive greater reinsurance claims, now being into the double-digit billions.

Moody’s RMS said its loss estimate reflects wind losses in Florida, Georgia, the Carolinas, and parts of the Mid-Atlantic, as well as storm surge losses in Florida, plus impacts from precipitation-induced inland flooding in the affected regions, particularly North Carolina.

The estimated losses incorporate property damage and business interruption to residential, commercial, industrial, and automobile lines of business, and consider sources of post-event loss amplification (PLA) and non-modeled losses from extended power outages, and infrastructure damage to roads, transmission, and distribution lines.

Mohsen Rahnama, Chief Risk Modeling Officer, Moody’s, said, “Hurricane Helene is by far the most impactful event of the current 2024 hurricane season thus far, though this may quickly change with Major Hurricane Milton due to impact Florida in the coming days. With Helene, multiple states were affected with different degrees of damage from wind, storm surge, and excessive rainfall-induced flooding.

“With a unique and complex event such as Helene, delivering a complete and well-informed view of expected losses across all major sources is paramount. In developing the wind footprint for this event, we benefited from access to critical observational data from areas that experienced the strongest winds, thanks to our exclusive partnership with Texas Tech’s StickNet program.

“Additionally, our broader observational data network that informs our Moody’s RMS HWind products allowed us to address remaining gaps in station coverage. Complimenting these quantitative data sources was a wealth of qualitative insights from aerial imagery analysis of building footprints and our field reconnaissance team that spent several days surveying the extent and severity of wind and water damage in Florida, Georgia, and South Carolina.”

Firas Saleh, Director – U.S. Inland Flood Models, Moody’s added, “The worst impacts from this event are from inland flooding, where Helene completely devastated several towns in North Carolina, Tennessee, and surrounding states with historical levels of precipitation. Thousands of buildings were exposed to fast-moving waters over eight feet, and several to depths greater than 15 feet. We expect widespread damage and total constructive losses in these regions, with prolonged recovery after the catastrophic infrastructure damage.

“Unfortunately, flood insurance penetration is extremely low in the worst-affected region, meaning most of the damage will be uninsured, and economic property losses will far outweigh insured losses. We expect to see Helene accelerating flood insurance purchases to help close the significant flood protection gap in these regions.”

Raj Vojjala, Managing Director, Modeling and Analytics, Moody’s, also commented, “From a wind perspective, the building stock in Florida continues to be resilient, thanks to improved code provisions and the requirement to ‘build back better’ following recent Hurricanes like Irma, Ian, Idalia, etc. However, in interior parts of Georgia and the Carolinas, building stock tends to be older with less stringent enforcement of wind design provisions. Many of these structures with aged roofs did not withstand damaging winds that extended far inland in Helene due to the fast forward speed of the storm.

“An unprecedented amount of treefall-related property damage, from high winds and saturated soils, further exacerbated wind losses in Georgia, making Helene potentially the worst hurricane loss in the state’s history. As such, even though the strongest winds were observed in Florida, we expect insured wind losses in this event to be driven by the interior states.”

Jeff Waters, Director – North Atlantic Hurricane Models, Moody’s, further stated, “The combined impacts of wind and water from this event are noteworthy. Helene underwent rapid growth and intensification in the days leading up to landfall, resulting in a large wind field that prompted storm surge forecasts of up to 20 feet along Florida’s Gulf coastline. While the observed surge was not as severe, exposure-rich areas like Tampa Bay and points northward experienced record water levels and surge losses during the event.

“NFIP take-up rates in Florida are the highest in the country, which should help absorb some of the losses in coastal counties. However, low coverage limits on NFIP policies mean a sizable portion of water damage could seep into the private market through standalone flood policies or via coverage leakage into wind-only policies.”

Also read:

– Hurricane Helene insured loss estimate now $10.5bn – $17.5bn including NFIP: CoreLogic.
– Reinsurers (and ILS) can absorb any hurricane Helene losses within earnings: S&P.
– Hurricane Helene private/public insured losses likely at least in higher single-digit billions: Aon.
– Some nerves evident as Helene’s Florida claims outpace Idalia, State Farm’s outpace Ian, & on NFIP.
– Hurricane Helene insurance industry loss estimated close to $6.4bn by KCC.
– Direct cat bond losses still seen unlikely from Helene, but NFIP bonds monitored: Twelve Capital.
– Hurricane Helene floods over 100k buildings, at least 10k to over 5 feet: ICEYE.
– Hurricane Helene insured losses anywhere from mid-single to even double-digit billions: RBC.
– 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.