(Re)insurers are likely to absorb $25bn of insured losses from Hurricane Irma, according to the latest estimates from Karen Clark & Company (KCC).
In a flash bulletin published on 13 September, the firm said the forecasts comprises of $18bn of claims in the US and $7bn in the Caribbean.
Estimates include losses to buildings, other insured structures, contents, business interruption, and autos. However, KCC noted that the projections exclude losses covered by crop insurers and the National Flood Insurance Program (NFIP).
Of the forecasted $18bn of insured losses in the US, the catastrophe modelling firm said that the majority stems from Florida, followed by Georgia, South Carolina and Alabama.
Hurricane Irma formed as a tropical storm on 30 August in the eastern Atlantic, quickly intensifying into to a Category 5 hurricane on 5 September when it passed over the northern Leeward Islands, making it one of the most powerful Atlantic hurricanes on record.
Irma then destructed parts of Barbuda, St. Martin, and the British Virgin Islands before moving north of Puerto Rico and tracking close to Turks and Caicos.
Irma remained a Category 5 storm until 8 September, when wind speeds began to weaken as Irma made landfall in Cuba, after which the storm began to head towards Florida.
On 7 September, the National Hurricane Center (NHC) projected a Florida landfall near downtown Miami as a strong Category 4 hurricane. Had the hurricane stayed on track and not shifted and abated, KCC highlighted that insured losses could have $150bn, chiefly driven by strong winds.
Irma was downgraded to a Category 3 storm before turning north towards Florida on 10 September.
The storm initially made landfall across Cudjoe Key, with the Keys area seeing the most destruction due to experiencing the full force of 130 mph winds along with significant flooding. Irma then made a second landfall in the US at Marco Island a little after 15:00 local time with wind speeds of 115 mph.
KCC said that because Irma weakened significantly after crossing Cudjoe Key and before impacting the southwestern coast, the storm surge was much less significant in Naples, Fort Myers, and Tampa than has been initially feared.
“Even the wind damage turned out to be relatively minor after the second landfall due to the rapid storm decay. Direct wind impacts were mostly limited to mobile homes, light structures, signage, and spotty roof and window damage. Except for in the Keys, major structural damage for the most part was caused by falling trees,” the company said.
Nonetheless, the majority of Florida was impacted by the storm, with hurricane force winds extended 80 miles from the storm centre meaning that minor wind damage also occurred in Georgia, Alabama, and South Carolina along with inland flooding.
Meanwhile, on 11 September, AIR released a revised estimate that Irma insured losses in the US alone could range between $20bn and $40bn based on the NHC’s forecast for the hurricane at 17:00 Eastern Time on 10 September. It noted that these estimates do not include losses paid out by the NFIP, losses to inland marine, marine cargo and hull and pleasure boats and losses to infrastructure.