Ida losses up to $30 billion, warn analysts

Hurricane Ida, which made landfall near Port Fourchon on Sunday as a near Category 4 hurricane, matched the strongest on record in Louisiana and has brought “catastrophic damage”, according to brokers  Guy Carpenter.

Matching Hurricane Laura in 2020 and the Last Island Hurricane in 1856, it’s the fifth strongest on record in the United States. Landfall occurred exactly 16 years after Hurricane Katrina, which brought more than $65 billion in total insured losses.

With sustained winds of 150 mph, storm surge over seven feet, flood emergencies over the entire state and tornado warnings to the east of the storm, the hurricane has already brought major and catastrophic transmission failures. Power failures are affecting 80% of Louisiana. 1,080,000 customers in Louisiana and 133,000 customers in Mississippi were without power on Monday morning.

While the post-Katrina levee system has protected New Orleans city, according to the broker, other levees in the region were overcome by surge waters, including the town of Jean Lafitte. Heavy rainfall continues as the storm moves to the Northeast, with Ida expected to travel through Tennessee, Kentucky and West Virginia before emerging back into the Atlantic over the Mid-Atlantic on Thursday.

As the storm approached before the weekend, Cat modellers Karen Clark & Company warned that insured losses would depend largely on how closely the strongest winds tracked to New Orleans. 
Early estimates from insurance analysts at Wells Fargo & Co. put insured losses at $15 billion to $20bn. Bloomberg Intelligence analysts, meanwhile, put losses between $10bn and $30bn. Insurance costs for residential flooding will largely be covered by the US National Flood Insurance Program (NFIP). With the NFIP already $20.5 billion in debt, Craig Poulton, chief executive officer of Poulton Associates,  told reporters that the losses are likely to renew calls for addressing low premiums for the program.