Helene private insured losses could be as high as $14bn

Private market insured losses from Hurricane Helene could be as high as $14 billion, according to insurance modeller Moody's RMS. 

Moody's RMS said it estimated total US private market insured losses from the hurricane which swept through the southeastern US last month to be between $8 billion and $14 billion, with a best estimate of $11 billion. This estimate represents insured losses associated with wind, storm surge, and precipitation-induced flooding from the event.  

Moody’s RMS Event Response also estimates losses to the National Flood Insurance Program (NFIP) from this event could reach US$2+ billion.

Hurricane Helene was the sixth named storm of the 2024 North Atlantic hurricane season, and the fourth hurricane to make landfall in the US this season. The most recent year with three or more landfalling US hurricanes is 2020.

The loss estimate reflected wind losses in Florida, Georgia, the Carolinas, and parts of the Mid-Atlantic, as well as storm surge losses in Florida, based on an analysis of ensemble footprints in Moody’s RMS Version 23 North Atlantic Hurricane Models. The ensemble footprints are reconstructions of Helene’s hazard that capture the uncertainties surrounding observed winds and storm surge.

The industry estimate also includes impacts from precipitation-induced inland flooding in the affected regions, particularly North Carolina.

Moody’s RMS Event Response said it expected the private market losses to be driven by wind, with a higher contribution coming from Georgia than Florida. However, storm surge in Florida and floods in North Carolina will also contribute notably to total private market-insured losses.

"In contrast, NFIP losses are expected to be largely driven by storm surge in Florida as take-up in the flood-devastated regions in North Carolina is minimal," the report said. "Insured wind and NFIP losses will be driven by residential lines, while storm surge and inland flood losses to the private market will be driven by commercial, industrial, and automobile lines." 

Mohsen Rahnama, Chief Risk Modeling Officer, Moody’s, said: “Hurricane Helene is by far the most impactful event of the current 2024 hurricane season, though this may quickly change with Major Hurricane Milton due to impact Florida in the coming days. With Helene, multiple states were affected with different degrees of damage from wind, storm surge, and excessive rainfall-induced flooding."

Firas Saleh, Director - US Inland Flood Models, Moody’s added: “The worst impacts from this event are from inland flooding, where Helene completely devastated several towns in North Carolina, Tennessee, and surrounding states with historical levels of precipitation. Thousands of buildings were exposed to fast-moving waters over eight feet, and several to depths greater than 15 feet. We expect widespread damage and total constructive losses in these regions, with prolonged recovery after the catastrophic infrastructure damage.

"Unfortunately, flood insurance penetration is extremely low in the worst-affected region, meaning most of the damage will be uninsured, and economic property losses will far outweigh insured losses. We expect to see Helene accelerating flood insurance purchases to help close the significant flood protection gap in these regions.”

Raj Vojjala, Managing Director, Modeling and Analytics, Moody’s, said “From a wind perspective, the building stock in Florida continues to be resilient, thanks to improved code provisions and the requirement to ‘build back better’ following recent Hurricanes like Irma, Ian, Idalia, etc. However, in interior parts of Georgia and the Carolinas, building stock tends to be older with less stringent enforcement of wind design provisions. Many of these structures with aged roofs did not withstand damaging winds that extended far inland in Helene due to the fast forward speed of the storm."

Jeff Waters, Director - North Atlantic Hurricane Models, Moody’s, commented: “The combined impacts of wind and water from this event are noteworthy. Helene underwent rapid growth and intensification in the days leading up to landfall, resulting in a large wind field that prompted storm surge forecasts of up to 20 feet along Florida’s Gulf coastline. While the observed surge was not as severe, exposure-rich areas like Tampa Bay and points northward experienced record water levels and surge losses during the event.

"NFIP take-up rates in Florida are the highest in the country, which should help absorb some of the losses in coastal counties. However, low coverage limits on NFIP policies mean a sizable portion of water damage could seep into the private market through standalone flood policies or via coverage leakage into wind-only policies.”

Did you get value from this story? Sign up to our free daily newsletters and get stories like this sent straight to your inbox.