NEW ORLEANS, Louisiana: Insurance companies could pay out some $18 billion after Hurricane Ida ravaged the U.S. and the Caribbean, according to catastrophe modeling company Karen Clark & Co.
This figure, the first from a leading risk-modeling expert in the industry, is closer to the lower end of initial estimates provided by insurance analysts earlier this week.
The Caribbean will account for $40 million of insured losses, while damages caused by winds and storms in the U.S. will make up remaining costs, Karen Clark & Co. added.
Hurricane Ida made landfall in the U.S. from the Gulf of Mexico on Sunday as a Category 4 storm, causing torrential rains and major flooding.
Earlier this week, insurance experts estimated claims will be between $15 billion and $30 billion, noting this figure could be higher, as the COVID-19 pandemic has increased related reconstruction costs.
Experts noted that the wide-ranging claims estimates, based on models of Ida's severity and path, will likely be far lower than the $87 billion from Hurricane Katrina in 2005, when adjusted for inflation.
But losses from Ida will probably exceed those from winter storm Uri at $15 billion, and Hurricane Laura at $10 billion, noted ratings agency Fitch.
Ida is equal to the Last Island Hurricane in 1856 and Hurricane Laura in 2020, in terms of the strongest maximum sustained winds at landfall recorded in Louisiana, added Karen Clark, whose forecast includes damages to privately insured residential, commercial and industrial properties and automobiles, but excludes boats, offshore properties or losses under the U.S. National Flood Insurance Program.
Ida's repercussions will hit hardest at Swiss Re and Lancashire's earnings per share, by 32 percent and 30 percent, respectively, while Hannover Re and reinsurance industry leader Munich Re would be least affected, UBS analysts stressed.