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Update on Hurricane Ian

“There is a challenge in reconstructing the wind footprint for Hurricane Ian, as there were multiple failures of wind stations recording results due to high windspeed..."

"Our event response (ER) team is working hard using the available data to finalize the footprint for Florida, including the second landfall in South Carolina.”

“Major Hurricane Ian is a historical event and very complex – a Category 4 event with a maximum 150 miles per windspeed and a 50-kilometer radius, massive record storm surge, and inland flood, all points to Ian most likely being one of the costliest events in Florida.”  

“The split of losses between wind and storm surge will be contentious, and also to understand what portion of loss will go to primary, reinsurance layers, and retro – and then to understand what will be covered by National Flood Insurance Program (NFIP) and what is in the gap and uninsured.”

“Claims leakage will focus on factors from loss amplification due to constraints in rebuilding supplies and contractors, through to another big wildcard – inflation, which will percolate through the system in several ways.”

“The current inflation situation pre-Hurricane Ian and any shortage of materials and qualified contractors in Florida will amplify the repair cost. I believe the repair will be in multiple stages, starting with a quick functional repair followed by the major repair - which requires a permit and qualified contractors.  Also, the considerable infrastructure damage from Ian will slow down the recovery and exacerbate the repair time and losses, especially for islands disconnected from the mainland due to bridges and piers damages.  We expect the full recovery takes a few years.”

“As shown in the recent events, particularly Hurricane Irma in 2017 where many cases ended up in the litigation process, we saw increases in claims cost.  For Ian, we expect that some of the claims’ closers will take more than a year due to potential litigation.”

“Basically, I believe this event will change the Florida insurance market landscape.”

 

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