Newark, CA:
RMS®, the world’s leading catastrophe risk solutions company, estimates onshore and offshore U.S. insured losses from Hurricane Ida in the Gulf of Mexico to be between US$25 and US$35 billion.
Another extreme event modeling firm AIR Worldwide estimates that industry insured losses to onshore property resulting from Hurricane Ida’s winds and storm surge will range from USD 17 billion to USD 25 billion.
AIR’s modeled insured loss estimates include insured physical damage to property (residential, commercial, industrial, auto), both structures and their contents from winds, wind-borne debris, storm surge, and the impact of demand surge. The industry loss estimates also reflect an adjustment to account for increased material and other repair costs in the current construction market. Hurricane precipitation-induced flood losses are not included in AIR estimates at this time.
The estimate of RMS includes losses to the National Flood Insurance Program (NFIP) in the four impacted Gulf Coast states (Alabama, Florida, Louisiana and Mississippi) in the range of US$2.3–$4 billion.
This estimate includes wind, storm surge, and inland flood losses across only the impacted Gulf states in the landfall region — Alabama, Florida, Louisiana and Mississippi — based on analysis of RMS ensemble footprints in Version 21 of the RMS North Atlantic Hurricane Models and estimates from the RMS U.S. Inland Flood HD Model. RMS ensemble footprints are reconstructions of Ida’s hazard that capture the uncertainties surrounding observed winds and storm surge. This estimate excludes wind and inland flooding impacts in Ohio Valley, Mid-Atlantic, and Northeast U.S. regions, which will be communicated in the coming days once the full extent of damage is known.
“Ida was truly a multi-faceted event in terms of hazard and loss impacts. RMS virtual reconnaissance efforts and analysis of aerial imagery show widespread wind and water-related damage in Louisiana and neighboring Gulf Coast states, including many severe or total structural losses. From a wind perspective, this storm was a design level event, where observed wind speeds often exceeded speeds that buildings have been designed to withstand, particularly in the hardest hit areas in southern Louisiana. Many areas impacted by Ida’s winds were also impacted by storm surge, precipitation-induced flooding, and the hurricane events of 2020. In these instances, loss attribution and differentiation may become more complex, leading to longer claims settlement periods,” said Jeff Waters, Senior Product Manager, RMS North Atlantic Hurricane Models.
Losses reflect property damage and business interruption to residential, commercial, automobile, industrial, infrastructure, marine cargo and specie, watercraft, and other speciality lines of business, along with post-event loss amplification (PLA) and non-modeled sources of loss.
“Ida was near Category 5 intensity at its landfall and remained for six hours at Category 4 intensity moving inland. The buildings and infrastructure in this region have never experienced such a strong hurricane wind intensity. Due to major damage to power plants, as well as transmission and distribution lines, the widespread power outage will significantly delay full recovery. We expect material impacts to specialty lines from this event. Southern Louisiana has a high concentration of petrochemical plants, refineries, marine cargo and port exposures, power plants and other high-value industrial facilities that were impacted by Ida. These businesses rely heavily on the state’s power grid. With prolonged anticipated recovery times, we expect material business interruption losses to these lines on top of varying degrees of infrastructure damage they sustained,” said Mohsen Rahnama, Chief Risk Modeling Officer, RMS.
The estimate also includes US$2.3–$4 billion losses to the National Flood Insurance Program (NFIP) in the Gulf Coast states. NFIP losses were derived using RMS’ view of NFIP exposure based on 2019 policy-in-force data published by FEMA, the Version 21 North Atlantic Hurricane Models, and the U.S. Inland Flood HD Model.
RMS expects insured wind losses in this event to be driven by residential lines, and insured water-related losses to be dominated by commercial and industrial lines.
Additionally, RMS estimates insured losses to offshore platforms, rigs, and pipelines in the Gulf of Mexico to be between US$0.7–$1.5 billion from wind and wave-driven damages. Offshore losses are based on the August 2021 vintage of the RMS Offshore Platform Industry Exposure Database.
Ida made landfall near Port Fourchon, Louisiana, on Sunday, August 29 as a Category 4 hurricane on the Saffir-Simpson Hurricane Wind Scale. At landfall, Ida produced sustained winds of 150 miles per hour (241 km/h), according to the National Hurricane Center. Informed by a suite of public and private real-time observational data sources, RMS HWind products estimated comparable winds at landfall. The track, landfall location, and intensity were also anticipated and captured by the HWind forecasting products several days prior to landfall.