Hurricane Ida Seen Costing Insurers at Least $15 Billion
(Bloomberg) -- Hurricane Ida could cost insurers at least $15 billion, according to one of the earliest estimates, as analysts start assessing the damage from one of the most powerful storms to strike Louisiana and the Gulf Coast.
That was the low end of a preliminary estimate by Wells Fargo & Co. insurance analysts led by Elyse Greenspan, who said damages covered by insurers could be as high as $20 billion, according to a note to clients on Sunday.
Some past storms, including Hurricane Katrina, left extensive damage that wasn’t clear until days after landfall, so early estimates are subject to major modifications. RBC Capital Markets’ Mark Dwelle said $20 billion is a good starting point, but he warned that energy losses are still unknown, there could be further inland damage and levy failure sometimes occurs awhile after the hurricane first strikes.
“The winds continue to blow and water levels continue to surge,” Dwelle said Monday in a note to clients. “It could be some time before a full picture of insured losses emerges, but, at this point, we are not expecting a ‘worst case’ loss, though we would expect a sizable total” that could affect insurance pricing.
What Bloomberg Intelligence Says
“Our early view is that insured losses may surpass the roughly $10 billion of 2020’s Hurricane Laura and could approach $30 billion. The magnitude will depend on damage to New Orleans and commercial energy interests.”
--Matthew Palazola, senior industry analyst, and Kylie Towbin, associate analyst. Click here to read the report.
Insurers in the region have been readying teams to swoop in after the storm moves on. Allstate Corp., the second-biggest home insurer in Louisiana, has claims workers on standby in Alabama and Texas, while the third-largest home insurer in the state, United Services Automobile Association, had catastrophe-response groups nearby in Texas, according to spokespeople for the companies.
Claims are slowly starting to roll in. USAA has had just under 1,000 claims, but expects that to grow, according to spokesperson Rebekah Nelson. State Farm Mutual Automobile Insurance Co., the largest home insurer in Louisiana, said it’s seen more than 2,600 claims from auto and fire as of 12:30 p.m. in New York. But the lack of power in certain areas of the state means that there’s likely more damage to be reported, according to State Farm spokesperson Kevin Gamble.
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