Hurricane Matthew-related insured losses are still being tallied, but RMS said that the number will reach as high as $5 billion in the U.S. and $3 billon in the Caribbean.
The catastrophe modeling firm said that U.S. insured losses will likely land between $1.5 billion and $5 billion, with 70 percent of the number coming from residential lines. RMS said that storm surge-driven coastal flooding will likely contribute to 30 percent of the total loss across lines, including coverage leakage and an escalation in claims severity for wind-only policies in situations where wind and water hazards co-exist in residential lines.
While only one of the 10 RMS event reconstructions generated a U.S. loss above $4 billion, RMS said there is still a chance that losses could hit the $5 billion mark, as its estimate does not include National Flood Insurance Program losses or losses to public buildings/infrastructure.
RMS said that the Caribbean will likely deal with losses between $1 billion and $3 billion, with the Bahamas facing much of this.
Hurricane Matthew hit from Oct. 5-9, causing death and massive damage in the Caribbean before moving through coastal Florida, Georgia, South Carolina, North Carolina and Virginia. Karen Clark & Co. estimated earlier this month that the affected U.S. states alone sustained nearly $7 billion in insured losses.
Both loss estimates factor in property damage and business interruption caused by wind and coastal flooding hitting residential, commercial and industrial lines of business, RMS said.
For the U.S., the RMS loss estimate, for now, excludes damage associated with inland flooding. The rationale: a post-event estimation of the impact of inland flooding can only be done once all inland flooding has concluded, and some rivers are still at flood level.
North Carolina ended up dealing with severe flooding due to massive rains related to Matthew’s onslaught.
RMS said it does not expect the private insurance industry to deal with a high number of flood claims because residential inland flood losses are either covered by the National Flood Insurance Program or excluded from insurance coverage.