RMS Estimates that Insured Losses from Hurricane Isaias Will Be Between US$3bn – US$5bn

RMS estimates that total insured losses from Hurricane Isaias will be between US$3.0 and US$5.0 billion. The estimate includes estimated losses to the National Flood Insurance Program (NFIP), which RMS expects to be between US$400m and US$700m...

Hurricane Isaias insured loss estimates ranges for the U.S. and Caribbean (US$ billions): 

“Although Isaias weakened to a tropical storm after landfall, it maintained its intensity as it moved up the U.S. east coast and underwent extratropical transition, due to its interaction with a strong jet stream and favorable atmospheric conditions. As a result, many areas of high exposure, especially in the Mid-Atlantic and Northeast, were subject to stronger winds and wind gusts than would otherwise be expected, especially in coastal areas of these regions. It’s another example of how impactful low intensity storms can be”, said Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models.   

For the U.S., this estimate includes wind, storm surge, and inland flood losses across parts of the Southeast, Mid-Atlantic, and Northeast regions, based on analysis of RMS ensemble footprints (hazard reconstructions of Isaias’s wind field and storm surge) in Version 18.1 of the RMS North Atlantic Hurricane Models and the RMS U.S. Inland Flood HD Model.  

The U.S. estimate reflects property damage and business interruption to residential, commercial, industrial, and automobile lines of business. It also includes factors for post-event loss amplification and non-modeled sources of loss, including the current COVID-19 pandemic. RMS expects the majority of insured losses to impact residential lines.  

“The large number of affected exposures, especially in the Mid-Atlantic and Northeast U.S., are likely to produce large claims volumes. Pressure to settle these claims quickly may lead to claims inflation. We also considered the impacts of the COVID-19 pandemic. We expect fewer loss inspections following this event, potentially causing prolonged repairs and recovery times, both of which tend to inflate claims costs” said Pete Dailey, vice president, Product Management, RMS. 

The estimate also includes estimated losses to the National Flood Insurance Program (NFIP), which RMS expects to be between US$400m and US$700m. RMS derived the NFIP losses using an RMS view of NFIP exposure based on the 2019 NFIP policy-in-force data published by FEMA in 2019. 

RMS expects the majority of total U.S. insured losses to be driven by wind. Storm surge expected to contribute to less than 10% of the total losses.  

For the Caribbean, this estimate includes wind-only losses, which RMS expects to be less than US$500 million, based on analysis of RMS post-landfall stochastic event tracks in Version 18.1 of the RMS North Atlantic Hurricane Models. The Caribbean loss estimate includes property damage and business interruption to residential, commercial, and industrial lines of business.  

The RMS insured wind and storm surge loss estimates for Hurricane Isaias are based on RMS industry exposure databases representing insured hurricane exposure in the U.S. and Caribbean.  

Hurricane Isaias was the ninth named storm of the 2020 North Atlantic hurricane season, and the second landfalling hurricane of the season. It was the Atlantic Basin's earliest forming "I" storm on record. Isaias made landfall near Ocean Isle Beach, North Carolina on August 3, 2020 as a Category 1 hurricane on the Saffir-Simpson Hurricane Wind Scale with maximum sustained winds of 85 mph (140 km/h) according to the National Hurricane Center and RMS HWind. The storm subsequently weakened to tropical storm intensity and quickly tracked northeast along the east coast of the U.S., affecting much of the Mid-Atlantic and Northeast U.S. with tropical storm-force winds and stronger gusts.  

Prior to impacting the U.S., Isaias made landfall over Andros Island in the Bahamas on Saturday, August 1, also as a Category 1 hurricane. Other Caribbean countries and territories impacted by the storm include Puerto Rico, the Dominican Republic, and the Turks and Caicos.