Ida losses are escalating due to inland flooding and supply chain disruptions, according to modellers at AIR Worldwide. The modelling firm has increased its initial estimates of insured losses to as much as $30 billion as a result.
AIR still estimates, as it did in early September, that wind and storm surge losses will range from $17bn to $25bn, but has added private-market insured losses from inland flooding of between $2.5bn and $5bn. The estimates include onshore residential, commercial, industrial properties, and automobiles for their building, contents, and time element coverage, as well as estimated insurance take-up rates for wind and flood across the entirety of Ida’s track.
They do not include any estimate of losses from the National Flood Insurance Program,
AIR also notes that materials costs have gone up significantly in the past year due to supply chain disruption in the construction market. Despite a decline since their peak in July when they were 80% higher than September 2020, it states that they remain about 30% higher. Repair costs are still up significantly.
“Reconstruction costs are more expensive today than they were a year ago. The increase in the total reconstruction cost index means that costs are higher on average nationally; this affects the low- as well as the high-severity events,” its analysis reads.
“These increases are outside the scope of demand surge, which tries to answer the cost increase question from a post–extreme event perspective. Therefore, companies should bear these increases in mind and should expect the average claim to be higher before considering demand surge.”
AIR Worldwide, Insured Losses, Hurricane Ida, Floods, Catastrophe, Insurance, Reinsurance, North America