Irene's Damage Has Insurers Scrambling to Assess
Irene may not have lived up to her dreary forecasts, but the Category-3-hurricane-turned-tropical-storm still carved out her mark on the East Coast and insurers continue to assess the damages.
Initial forecasts of insured and uninsured losses peg the storms damages around $7 billion.
While fierce, the catastrophe losses dont touch Katrinas $105.8 billion in 2004, and they dont even put Irene in the top 10 damaging storms, according to the National Hurricane Center.
Yet, with 4.5 billion left without power in at least a dozen states, 2.3 million forced to evacuate, 11,000 flights cancelled and at least 20 deaths, Irene and her vicious winds and storm surges have left insurers scrambling as they continue to assess damages throughout the Mid-Atlantic and Northeast.
"Irene is a major event and will be responsible for significant levels of insured losses to property and people," Eqecat said in a loss report.
The $7 billion figure includes both insured and uninsured damages, government and private spending to clean up after the storm and unrecorded expenses for business interruption, according to data from risk-management company Kinetic Analysis.
Approximately 16% of total U.S. economic activity was shutdown due to the storm.
Kinetic estimates damages of approximately $1.4 billion in North Carolina, and some $757.3 million in Virginia and Washington, D.C.
While damage appraisals from wind and rain in the Northeast are still being assessed, and rivers in New Jersey continue to teeter at the brink, initial forecasts by Kinetic put damages at $2.1 billion in New Jersey, $2 billion in New York, and a combined $1 billion in Maryland, Pennsylvania, Connecticut and Delaware.
Only including the cost to insurers, though, the total estimated cost falls to about $2.6 billion, according to Kinetic. Last week, the company had predicted that Irene, which started as a Category 3 hurricane in the Caribbean before gradually weakening as it barreled up the coast, could cause as much as $14 billion.
One insurance broker, Wills, had predicted it would take at least $15 billion in losses to materially change the insurance market, which has been hit by a record year of catastrophe losses due to devastating tornados and floods earlier this year in the Midwest as well as earthquakes in Japan and New Zealand.
New Jersey fared far worse than its neighbors. Kinetic estimates the state saw some $751.79 million in losses just to insurers, followed closely by North Carolina with $687.82 million and New York with $471.79 million.
In the Bahamas, Puerto Rico and Turks and Caicos as a Category 3 hurricane, Irene caused an estimated $300 to $600 million in insured losses, according to Eqecat.
Wall Street seemed to be cheering the weaker-than-expected damages on Monday.
Shares of the nation's top property and casualty insurers traded higher this morning, including those of Allstate (NYSE:ALL), Chubb (NYSE:CB) and Travelers (NYSE:TRV) that all faced the biggest potential threat from Irene.
Irene Doesn't Cut List of Costliest Storms
Data Since 1970, Adjusted for Inflation
Source: National Hurricane Center