view counter

Disaster costEconomic costs of Harvey, Irma $200-$300 billion; insured cost to reach $70 billion

Published 18 September 2017

The insured cost of Hurricanes Harvey and Irma is likely to reach $70 billion, while the economic cost — which includes uninsured losses – is in the range of $200 billion to $300 billion, leading insurers say. Lloyd’s of London said the claims would make 2017 one of the worst years for natural disasters with the hurricane season not yet over.

Bronek Masojada, chief executive of Hiscox, said insured losses for Harvey are estimated to be in the range of $20-$30 billion, while the cost of insured losses of Irma was expected to be $30 billion-$40 billion. Masojada was using estimates from the risk modelling firm AIR Worldwide. A rival risk analysis firm, RMS, estimated insured losses from Harvey could be up to $35 billion, which would take the total to $75 billion.

Lloyd’s of London said the claims would make 2017 one of the worst years for natural disasters with the hurricane season not yet over.

Lloyd’s noted, however, that the scale of the destruction caused by Irma, while considerable, was less than had been feared.

Estimates of the total economic cost — which includes uninsured losses –is in the range of $200 billion to $300 billion. Masojada highlighted the fact that only one in six Houston homeowners had flood insurance.

The Guardian quotes him to say that the price of property insuring property would now rise across the United States, not just in in Texas and Florida.

He said: “People buy programs covering all of their property, wherever they are in America. So [price rises] will be broader than just Texas and Florida.

“It’s only halfway through the hurricane season and we’ve already had one of the most expensive years ever.”

FEMA said last week that A quarter of the houses in the Florida Keys have been destroyed, and another 65 percent suffered major damage.