New Insured Loss Estimate of $18.75B from Sandy: PCS

NEW YORK—Verisk's Property Claim Services (PCS) unit has increased its insured-loss estimate from Superstorm Sandy to $18.75 billion, with a large majority of losses felt in New York and New Jersey.

Speaking at the Extreme Weather Insurance Risk Management Congress organized by American Business Conferences on Jan. 23, Alex Korb of Verisk Analytics says about $16 billion in insured losses can be traced to New York and New Jersey—about $9.6  billion from the Empire State and about $6.3 billion from the Garden State.

The estimate of insured losses includes personal and commercial property as well as personal and commercial auto, says Korb, a manager at Verisk who focuses on corporate development and the insurance-linked securities marketplace.

According to its latest data, Verisk has dismissed the notion that Connecticut should be grouped among states with the highest insured loss from the late October storm. Instead, Pennsylvania with its $700,000 million in insured losses and Maryland with $400,000 million in insured losses can now officially be mentioned among the unfortunate leaders in insured losses.

PCS’ previous estimated insured-loss tally from Sandy was $11 billion, but it said the figure was likely to rise.

Catastrophe risk modeling firms have come in with estimates as high as $25 billion—but these estimates take into other considerations, such as business interruption and “leakage”—or the payment of flood losses on policies that actually do not cover the peril.

Independent reinsurance-brokerage firm Holborn says insured losses from Sandy could reach $30 billion.

The conference Jan. 23 focused on quantifying and managing non-modeled catastrophes. If the estimate from PCS is accurate, it would indeed seem as if the models had a hard time assessing Sandy, since modeler Eqecat released an estimate of $20 billion—not far from PCS’ property-only, insured-loss estimate.

Even the highest predicted insured-loss tally of up to $25 billion from modeler Risk Management Solutions isn’t far from the mark set by PCS. Modeler AIR Worldwide released an estimated range of losses of between $16 billion and $22 billion.

Returning to the losses in New York and New Jersey, Korb says around half—about $8.1 billion—are commercial property losses. About $5.2 billion are said to come from personal property, with $2.6 billion attributed to auto losses.

He says Sandy generated about 1.5 million claims from all affected states, with 1.1 million coming from New York and New Jersey.

Jason Taylor, director of strategic sales for Xactware, says Sandy “is still an event for claims.” He warned the figures were preliminary, but the firm—which provides claims-related software to claims and underwriting professionals—has 500,000 claims in its system.

Surprisingly, he says, “demand surge is not as severe” as it has been after some storms of recent history probably because of advanced notice and preparations taken prior to landfall.

“Labor is driving demand surge—the availability of materials is not affecting demand,” Taylor says. Big-box construction suppliers brought in materials to ready for the demand, he theorizes.


Resource Center

View All »

Guide: 5 Steps to Selling Cyber

Cyber risk and data security is on the agenda of every business owner and executive....

Citation Correlation

Do rigger and signalperson qualifications correlate with the cause of crane and rigging accidents? ...

Complete Guide to Electronic Signatures in Property & Casualty Insurance...

In property and casualty insurance, closing new business quickly is key. Learn how to leverage...

INSTANT ACCESS: Complimentary Sales Closer Questionnaires

Help property owners or managers compare your commercial residential property insurance coverage vs. the competition....

Determining Vacant Property Perils and Valuations

Are your clients fully covered for Vacant Properties? In this economic climate, your insureds may...

Risk Management for Law Firms

This package of 3 concise risk management articles offers straightforward content and practical suggestions law...

Guide: Top 15 E&O Risks-And How To Avoid Them

Accidents happen. But when it's an errors and omissions oversight, that accident can open your...

We'll Show You How to Reach Your Sales Goals

Whether you work alone or have a team of agents working for you, we can...

Get The Most From Your Book Of Business

Turn your existing book into an exclusive program or roll your book. Learn about the...

Who Pays When There’s a Pollution Claim on an Auto...

The Pollution Liability - Broadened Coverage of Covered Auto (CA 99 48 03 06) endorsement...

Agent & Broker Insider eNewsletter

Proven success tips and essential information to help agents and brokers grow their practice – FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.