Moody's RMS estimates $11 billion in private insured losses from Hurricane Helene

Moody’s RMS estimates $11 billion in private insured losses from Hurricane Helene | Insurance Business America

Catastrophe & Flood

Moody’s RMS estimates $11 billion in private insured losses from Hurricane Helene

Wind, storm surge, and flooding drive losses, with NFIP claims reaching billions

Catastrophe & Flood

By
Kenneth Araullo

Moody’s RMS Event Response has estimated that total US private market insured losses from Hurricane Helene will range between $8 billion and $14 billion, with a best estimate of $11 billion.

This estimate includes losses associated with wind, storm surge, and flooding caused by the storm. In addition, losses to the National Flood Insurance Program (NFIP) are expected to exceed $2 billion.

Hurricane Helene, the sixth named storm of the 2024 North Atlantic hurricane season, made landfall as a Category 4 storm near Perry in Taylor County, Florida, on Sept. 27. At the time of landfall, Helene had maximum sustained winds of 140 mph and a central pressure of 938 hPa.

The hurricane brought significant wind, storm surge, and rainfall to several states, including Florida, Georgia, the Carolinas, and parts of the Mid-Atlantic.

Moody’s RMS derived these estimates using their Version 23 North Atlantic Hurricane Models to analyze the storm’s impact. The estimates factor in wind and storm surge losses in affected areas and precipitation-induced flooding, particularly in North Carolina.

The analysis is based on ensemble footprints, which reconstruct Helene’s wind and storm surge patterns to account for uncertainties in the observed data. For flooding, the flood footprint was analyzed using Moody’s RMS US Inland Flood HD Model.

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Private market loss estimates are informed by Moody’s RMS US Hurricane and US Private Flood industry exposure databases, while NFIP losses are based on data published by FEMA regarding policies in force.

The loss estimate reflects damage to residential, commercial, industrial, and automobile lines, and includes business interruption. It also considers post-event loss amplification, such as extended power outages and infrastructure damage to roads and power lines.

While wind losses are expected to drive the bulk of private market claims, storm surge in Florida and flooding in North Carolina will also significantly contribute to the total.

The losses expected for the NFIP are likely to be driven by storm surge in Florida, where flood insurance penetration is higher than in other areas. In contrast, NFIP losses in flood-affected regions of North Carolina are expected to be lower due to minimal coverage in those areas.

Insured wind and NFIP claims are anticipated to come mainly from residential properties, while storm surge and inland flood losses in the private market are expected to impact commercial, industrial, and automobile policies.

With the approach of Major Hurricane Milton, which is forecast to make landfall on Florida’s west coast, claims adjusters may face challenges in distinguishing between damages caused by Helene and Milton in areas affected by both storms. The current loss estimate focuses solely on the impacts of Helene.

Mohsen Rahnama, chief risk modeling officer at Moody’s, commented on the scale of the event, noting that Hurricane Helene has been the most significant storm of the 2024 hurricane season so far.

“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,” Rahnama said.

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