Risk Management Solutions (RMS) has revised its U.S. onshore and offshore insured loss estimate for Hurricane Ike to $13-to-$21 billion, up from a $7-to-$12 billion estimate given on Sept. 17.

The revised loss estimate is based on “a new post-event modeling methodology that captures the uncertainty in Ike's wind and storm surge footprint, due to the lack of observations, using an ensemble of 300 varying simulations of this footprint,” RMS said.

The new figures include $10-to-$15 billion in estimated wind and storm surge damage in Texas and Louisiana, $2-to-$3 billion in damages from inland wind and flood losses, and $1-to-$3 billion in offshore losses. The figures do not include losses covered by the National Flood Insurance Program, RMS noted.

RMS said in a statement, “While the new modeling methodology better represents the losses expected from Hurricane Ike, the range of $13-to-$21 billion reflects the significant uncertainty that still remains in assessing insured losses. One of the greatest sources of uncertainty in the range is the amount of storm surge losses that will be insured across the broad coastal areas of Texas and Louisiana impacted by Ike.”

Catastrophe modeling firm AIR Worldwide, a subsidiary of Jersey City, N.J.-based Insurance Services Office Inc., indicated that it will not be updating its loss estimates for Hurricane Ike. Kevin Long, AIR spokesman, said the firm is confident in its $8-to-$12 billion onshore estimate. He added AIR will evaluate offshore estimates as more data comes in, but that the modeling firm is still confident in those figures as well.

Oakland, Calif.-based catastrophe modeling firm EQECAT spokesman Art Semansky said, “We always review our analysis as additional data becomes available.”

Special Reports /

RMS Revises Ike Loss Predictions Upward

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