Munich Re reiterates hurricane Ian industry loss estimate at $60bn (ex-NFIP)

Global reinsurance giant Munich Re still believes that hurricane Ian is set to drive roughly $100 billion in economic losses, with approximately $60 billion insured, excluding the NFIP’s losses.

The 2022 hurricane season now over, Munich Re has put out some figures on the insurance market impact from Atlantic storms this year.

Hurricane Ian is the main contributor, on the loss front, with the season as a whole seen as driving around $110 billion in economic losses and $65 billion of insured losses, excluding losses to the NFIP.

Despite their being fewer storms than anticipated, Munich Re notes the destructive and costly nature of the 2022 Atlantic hurricane season.

“2022 continues the trend of increasing losses from US hurricanes in recent years.

“Additionally, just a single storm like Ian is enough to cause immense losses. This is not new, of course, but it is important.

“Because it is precisely hurricanes like Ian – very strong storms with extreme precipitation – that will occur more frequently in the future due to climate change,” explained Ernst Rauch, Chief Climate Scientist, Munich Re.

The 2022 hurricane season is now the third most costly on record, despite only having 14 named storms, 8 hurricanes and 2 major hurricanes occur.

Which fell far short of many pre-season and in-season forecasts, including Munich Re’s own.

While La Niña conditions were expected to dominate and create an environment conducive to more tropical storms, in fact “unusually dry air in higher layers of the atmosphere and temporarily cooler water temperatures in the tropical North Atlantic meant that only a few and mostly weaker storms developed early in the season until the end of August,” Munich Re explained.

On hurricane Ian, Munich Re said that “Despite the extreme devastation, the damage caused by Hurricane Ian was within the scope of the scenarios used by Munich Re in its risk models.”

With FEMA having estimated that the National Flood Insurance Program (NFIP) will pay up to $5.3 billion of claims from hurricane Ian, Munich Re’s estimate for a $60 billion private market loss, seems in the upper-end of most ranges, being still around the $50 billion to $70 billion mark including the NFIP.

Munich Re had previously estimated its own net losses from hurricane Ian at roughly EUR €1.6 billion, based on an industry loss expectation of US $60 billion