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Assessment of Ida's impact on insurance companies takes several months



Moody & # 39 ;s Investors Services Inc. warned Monday that it could take "months" to assess the magnitude of Ida's impact on the real estate / accident sector after the Category 4 hurricane hit the Louisiana coast on Sunday.

After landing at Port Fourchon, Louisiana, south of New Orleans at about 1pm ET Sunday with a maximum sustained wind of 150 miles per hour, Ida remained a cat 4 for about six hours, then he was downgraded to a cat 3 with winds around 120 mph at 7pm . ET. There is expected to be a tropical depression over the Mississippi late Monday, according to a note Monday from Morgan Stanley.

Ida tied with Last Island Hurricane 1856 and Hurricane Laura 2020 for the strongest maximum sustaining winds for a landing in Louisiana. hurricane on record, Phil Klotzbach, a researcher at Colorado State University & # 39 ;s Tropical Meteorology Project in Boulder, wrote on his Twitter feed.

Moody & # 39; s warned that it will take a long time to evaluate Ida's impact on the industry.

"It will take months to determine the extent of the insured damages and the extent to which the hurricane affects primary property and accident insurance companies and regionally focused carriers, who are most vulnerable," said Moody & # 39; s. CNA Financial Corp. $ 1

33 million); Liberty Mutual Group Inc. ($ 87 million); and Zurich American Insurance Co., part of the Zurich Group ($ 82 million), according to Moody & # 39 ;s data. American Internal Group Inc. ($ 81 million)

The top 10 insurers in Louisiana write a total of $ 744 million in direct premiums and the industry's total state premiums are $ 1.735 billion, according to Moody & # 39; s.

Claims of commercial outages can be "significant" if the hurricane disrupts critical infrastructure or causes long-term power outages, said Moody & # 39; s. Insurers may also face demands for private personal and new vehicles, jet skis and other insured assets.

"Hurricane Ida is likely to be a significant wind and flood event, with significant service outages. We also recommend customers to consider all possible effects, including loss exposures that may involve commercial vehicles, claims and environmental claims, says William Liebler, United States Chief Executive Officer at Marsh LLC.

Mr. Liebler, who is based in New York, added that all final figures are some distance away.

“It is obviously too early to make exact forecasts regarding insured losses from Ida. We are currently reaching out to our customers in the affected area to ensure that they are safe and if they believe that their properties have been damaged or that their business operations have been affected, he says.

Aon PLC's Impact Forecasting also noted the first damages and probably extended timeline. "Hurricane Ida has caused extensive wind, storm surge and internal flood-related damage over Louisiana. Further damage is expected in Mississippi, Alabama and other inland states when heavy rains and calm winds from Ida or its remnants move into the Tennessee Valley and Mid-Atlantic, "Impact said in a Monday warning.

well into the double-digit billion dollars, a "significant" portion will not be covered by insurance, including most infrastructure or property damage without an active policy on national flood insurance.

Finally, Aon's impact stated that although "early indications suggest that the insurance effect – including losses from private and public entities – will also be a double-digit billion dollars … it will take many months or longer before the economic outlook on this event is fully developed. " [19659002] Morgan Stanley noted several potential mitigating factors for potential damage, most notably the $ 15 billion upgrade to the Hurricane Risk Risk Reduction System, which was completed in 2011. Also, the adoption of state building codes based on the 2006 International Building Code and International Residential Code can help. to reduce the likelihood of wind damage.

Louisiana Citizens Property Insurance Corp., an ongoing market mechanism for state residents and small businesses that cannot purchase property insurance through the voluntary market, can help absorb losses along the coast, Moody & # 39 ;s said. The agency has $ 545 million in total reinsurance and disaster bonds in place to pay for storm losses.

Hurricane Ida landed in Louisiana 16 years the day after Hurricane Katrina, the largest natural disaster in U.S. history, with insured losses of $ 65 billion – $ 86 billion in 2020 dollars, according to Aon figures such as Moody & # 39; s quotes.

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