Aon: Beryl could cost insurers ‘billions’
Hurricane Beryl could cost insurers billions of dollars and has caused 28 deaths, broker Aon said in its weekly catastrophe report, noting that the early season hurricane caused direct impacts over Houston.
The analysis supported an estimate produced by Karen Clark and Company that the hurricane, which swept across the Caribbean before barrelling into Texas, could have caused insured damage of $2.7 billion.
Aon noted that despite being removed from the warm waters of the Gulf after making landfall on Monday, Beryl failed to rapidly decay as it progressed further into southern Texas.
“The system did not weaken back into a tropical storm until 10am local time, a full six hours after landfall, according to the National Hurricane Center (NHC),” Aon said. “At the same time, the large eyewall of Beryl also moved directly through the western Houston metro area. This track is notable as northward-moving tropical cyclones in the Northern Hemisphere traditionally exhibit faster winds and heavier rainfall on the eastern side of the eyewall. As a result, Beryl’s strongest winds and heaviest rain impacted much of Houston for several hours.”
The hurricane also caused “notable tornado damage and localised flash flooding” in Louisiana and did further tornado damage in Arkansas, upstate New York and northern Vermont. In total, at least 12 people were killed in the US as a result of Beryl in addition to the updated death toll from the Carribean where at least 16 more people were killed.
“It is still too early to determine specific loss estimates as more detailed damage assessments are ongoing,” Aon added.”"However, given Beryl’s destruction in the Caribbean, direct impacts over Houston, and widespread damage elsewhere in the US and Canada, total economic and insured losses for the event may reach into the billions.”
Aon said the hurricane had already triggered a record $44 million insurance payout from the Caribbean Catastrophe Risk Insurance Facility to Grenada, which was larger than CCRIF’s previous record $40 million payout to Haiti in 2021.
“Other payouts from the firm due to Beryl were issued for St. Vincent and the Grenadines ($1.8 million) and Jamaica ($16.3 million). “
Karen Clark and Company said Hurricane Beryl could cost insurers up to $2.7 billion, while ratings agency Moody's said it did not expect the unseasonably early and deadly hurricane to affect rates.
Karen Clark and Company said it expected the privately insured loss from Hurricane Beryl to be close to $510 million in the Caribbean, $90 million in Mexico and $2.7 billion in the US.
It said the US estimate included the privately insured damage to residential, commercial, and industrial properties and automobiles, as well as business interruption. It does not include boats, offshore properties, or NFIP losses. The estimates in the Caribbean and Mexico do not include automobiles or business interruption.
It noted that 95% of the islands of Carriacou and Petit Martinique off Grenada were either damaged and destroyed while Union Island off St Vincent saw 90% of its homes destroyed.
The hurricane then knocked out power in 65% of Jamaica and damaged a significant number of homes and public buildings, causing millions of dollars in damage.
In Texas, the company said: “More than 2.5 million homes lost power throughout Texas. There have been many reports of downed trees falling on homes and cars throughout the impacted area. There have also been numerous reports of roof and structural damage, particularly in areas along the coast, including Surfside Beach and Jamaica Beach.
“Roof and siding damage have also been reported in Galveston, College Station, Houston and Pasadena.”
Moody's said that while Beryl will have a limited effect on insurers, “the aggregation of all events in an active hurricane season could lead to significant losses for P&C insurers depending on whether and where hurricanes make landfall”.
It added: “We do not expect Hurricane Beryl to change pricing conditions in the P&C and reinsurance sectors.”
Moody's noted that US primary insurers have been retaining a higher proportion of catastrophe risk in recent years as reinsurers have raised pricing and attachment points and pulled back on aggregate covers, meaning primary insurers will retain most of the losses from Hurricane Beryl.
“Losses along the Texas coast will be absorbed by the Texas Windstorm Insurance Association (TWIA), the state's insurer of last resort,” the agency said.
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