Posted on October 3, 2022
The economic loss from major hurricane Ian’s impacts in Florida has been initially estimated at around $65 billion by global GIS and geospatial technology company RMSI.
RMSI is the first company to publish an official estimate and while its not for insurance, reinsurance and ILS market losses, it does provide more supporting data to the industry, to help market participants derive a view on their own exposure to hurricane Ian.
RMSI said that it has now modeled hurricane Ian for Florida state and that its initial assessment indicates that about 500,000 buildings are estimated to be damaged by the storm.
The damaged buildings comprise of residential, commercial, industrial, educational and other essential buildings, RMSI said.
The company provided a graphic showing the distribution of the estimated damage as per occupancy type, which you can see a copy of below:
RMSI said that there could be impacts to 460,000 residential properties, 27,000 commercial properties, 600 educational facilities, and 7,800 industries affected by hurricane Ian.
The company breaks down its economic loss estimate of $65 billion into:
- $46 billion for residential property damage.
- $9 billion for business interruption.
- $6.5 billion for commercial property damage.
- $3.2 billion for industrial and essential buildings.
- Plus $60 million for electricity sub station damage.
Other infrastructure elements are not modelled and RMSI does not analyse marine exposures.
How does $65 billion of economic losses typically compare to the insurance and reinsurance market loss in other recent hurricane scenarios?
The most recent significant hurricane industry loss was hurricane Ida in 2021, and that was estimated by Munich Re to have been an economic loss of $65 billion, with insured losses of $36 billion.
Hurricane Irma, from 2017, was estimated to have caused economic losses of $67 billion, with Swiss Re estimating insured losses from this storm at $30 billion across the US and Caribbean.
So, if RMSI’s economic loss estimate of $65 billion for hurricane Ian is in the right ballpark, it sits well with an insurance and reinsurance market loss of around half of that, or at least in the rough area of $30 billion or so.