Filed Under:Claims, Catastrophe & Restoration

KCC estimates insured losses from Hurricane Maria will be $30 billion

Damaged homes are seen in the El Gandul Community in Santurce after Hurricane Maria, in San Juan, Puerto Rico, Monday, Sept. 25, 2017. (AP Photo/Carlos Giusti)
Damaged homes are seen in the El Gandul Community in Santurce after Hurricane Maria, in San Juan, Puerto Rico, Monday, Sept. 25, 2017. (AP Photo/Carlos Giusti)

Estimates of insured losses from this year’s hurricanes are still being calculated by carriers and modeling companies, and the numbers vary, based on what information underlies the estimates. The most recent estimates from Karen Clark & Company (KCC) using the company’s high-resolution Caribbean Tropical Cyclone model show insured losses from Hurricane Maria will reach $30 billion.

The modeled estimates include wind losses to residential, commercial, and industrial properties. Modeled property losses were increased by 20% to account for auto losses, insured flood damage, and additional demand surge.

In a hurricane season that was much more active than in previous years and included widespread destruction from Hurricane Harvey and Hurricane Irma, Hurricane Maria stood out for several reasons:

  • Maria was the second Category 5 hurricane to impact the Leeward Islands in September.
  • It was the strongest hurricane to make landfall in Puerto Rico since the San Felipe II Hurricane in 1928.
  • It was the first major hurricane to hit the Leeward Islands and Puerto Rico since Hurricane Hugo in 1989.
  • Maria strengthened from a Category 1 to a Category 5 hurricane in 15 hours, which is second only to Hurricane Wilma’s record of 12 hours in 2005.

Breakdown of Insured Losses Hurricane Maria

Source: Karen Clark & Company

Hurricane Maria and the San Felipe II Hurricane

Taking a look back at history, KCC found many similarities to the San Felipe II Hurricane that struck Puerto Rico in 1928. San Felipe II passed over Guadeloupe just north of Dominica with Category 4 wind speeds and intensified to a Category 5 hurricane as it followed a similar track south of the U.S. Virgin Islands.

Hurricane Maria weakened slightly on the final approach to Puerto Rico, while the San Felipe II Hurricane maintained intensity as a Category 5 storm and made landfall near Guayama with wind speeds close to 160 mph. As KCC explained, this landfall point is slightly south of Maria’s, but the storm made a similar southeast to northwest path across Puerto Rico. For the most part, the decay for both hurricanes was very similar as they crossed Puerto Rico, although the disparity in the initial wind speeds meant that the San Felipe II Hurricane was consistently stronger than Maria.

According to KCC estimates, a repeat of San Felipe II would cause insured losses in Puerto Rico similar to the losses caused by Hurricane Maria.

Maria tracked east of the Bahamas after impacting Puerto Rico and veered out to sea, while the San Felipe II Hurricane crossed the Bahamas and made landfall near Palm Beach as a Category 4 hurricane causing additional extensive damage in Florida.

Recovery and restoration continue in the Leeward Islands and Puerto Rico, but it’s likely to take months if not years for life as the islanders know it to achieve a sense of normalcy. In the meantime, the estimate of losses — both insured and uninsured — is likely to climb.

Leeward Islands Karen Clark

Source: Karen Clark & Company

Related: Catastrophe global re/insurance losses will exceed $100 billion in 2017, Fitch says

Related

Irma and Maria leave a wake of heartbreak and devastation

An insider’s view of the hurricane damage in Puerto Rico.

Featured Video

Most Recent Videos

Video Library ››

Top Story

Oh, deer! What drivers should know about animal collisions

One-third (34%) of all animal collision comprehensive claims are filed during the fall, according to Farmers Insurance.

Top Story

5 dated insurance business tools, technologies

Accelerating insurance industry innovation will mean moving away from the same old business processes.

More Resources

Comments

eNewsletter Sign Up

Claims Connection eNewsletter

Breaking news on disasters, fraud, legal trends, technology, and CE initiatives for the P&C claim professional – FREE. Sign Up Now!

Mobile Phone

Advertisement. Closing in 15 seconds.