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RMS: Insured Losses From Ike Could Reach $21 Billion
(BestWire Services Via Acquire Media NewsEdge) Risk Management Solutions has raised estimates for onshore and offshore insured losses caused by Hurricane Ike last month, possibly making it the third-costliest hurricane in United States history.
RMS now predicts losses will fall between $13 billion and $21 billion. The catastrophe modeler initially estimated losses of $7 billion to $12 billion from the Sept. 13 hurricane.
Between $10 billion and $15 billion is estimated for wind and storm surge in Texas and Louisiana. RMS predicts $2 billion to $3 billion in inland wind and flood losses as the storm moved north into the Midwest after making landfall in Galveston, Texas. The overall projection also includes offshore losses of between $1 billion and $3 billion but it does not include losses covered by the National Flood Insurance Program.
Hurricane Katrina in 2005 and Hurricane Andrew in 1992 rank as the top two costliest hurricanes in history, with insured losses of $43.6 billion and $22.9 billion, respectively, in 2007 dollars, according to Insurance Information Institute. Hurricane Wilma in 2005 is currently ranked as the third-costliest hurricane with $10.9 billion in insured losses, in 2007 dollars.
Shortly after the storm, advisory firm Deloitte said that Ike could cause $20 billion to $25 billion in total insured losses, including losses from the National Flood Insurance Program. Deloitte said $10 billion to $20 billion will be attributed to the commercial and reinsurance industry. Catastrophe risk modeler AIR Worldwide Corp. said insured losses from Ike are estimated between $8 billion and $12 billion onshore (BestWire, Sept. 15, 2008).
The Texas Windstorm Insurance Association lowered its preliminary insured loss estimate as a result of Ike. The last-resort insurer now expects insured losses of about $2.7 billion. TWIA had predicted $4.2 billion in losses (BestWire, Oct. 13, 2008).
In 2007, the top writers of homeowners multiperil in Texas, according to A.M. Best Co. state/line product information based on direct premiums written, were State Farm Group, with a 29.4% market share; Allstate Insurance Group, with 14.7%; Farmers Insurance Group, with 13%; USAA Group, with 7.6%; and Travelers Group, with 5.4%.
(By Chad Hemenway, associate editor, BestWeek: Chad.Hemenway@ambest.com)
Copyright ? 2008 A.M. Best Company, Inc.
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