Insurers are facing a $15.4bn (£11.9bn) loss from Hurricane Harvey, according to the latest research from catastrophe risk modelling experts.
With the extent of the devastation becoming clearer, economic loss estimates earlier today topped $190bn; more than the cost of hurricanes Sandy and Katrina put together.
The US government's National Flood Insurance Programme (NFIP) – similar to Flood Re in the UK – will likely pick up the majority of the bill. However, commercial insurance for damage and business interruption will fall on the wider insurance sector.
Boston-based Karen Clark & Co today said insurers will pick up the tab for $12.4bn of inland flood losses, $2.5bn of wind losses and $500m of storm surge losses.
While the total of $15.4bn is lower than earlier estimates by Morgan Stanley of $25bn, the flood losses element is higher than previously thought.
On Tuesday, Peel Hunt analyst Andreas van Embden predicted insurers were facing losses of anywhere between $4bn and $15bn.
“As the storm drags on, my numbers will nudge up," he said. "The longer businesses stand under water, the more damage there is."
While experts have predicted the insurance costs will likely arrest a softening of catastrophe insurance premiums, the economic losses are not at the level to return more robust pricing, Panmure Gordon's head of research Barrie Cornes said earlier this week. He said:
It needs a $300bn or $400bn to remove enough capacity, enough money out of the insurance system to enable rates to move forward.
Hurricane Harvey – fast facts