A major hurricane in a large US city could cause a $US100 billion ($155 billion) insured loss, and such an event is likely due to increased coastal exposures, according to risk modeller Karen Clark & Co. 

The US group says the most important determinant of insured losses from hurricanes is landfall location, and insurers must be aware of their concentration risk.

“Shifting the landfall point by only 10 miles (16km) can make a big difference in industry as well as individual company losses,” Karen Clark & Co said.  

Houston, Tampa, Miami, New Orleans and New York are possible loss hotspots.

“While insured losses are highly dependent on location, losses are not strongly correlated with storm frequency.”

Although 2020 was an active year, with six hurricanes making landfall, annual insured losses were about average.  

Above-average years tend to be dominated by individual large loss events.

Historic hurricane losses are often adjusted for inflation to give a figure in today’s money, but Karen Clark & Co says that does not allow for increased urbanisation and wealth.

The Great Miami Hurricane of 1926 occurred when the city’s population was 100,000. Today it is 6 million, and Karen Clark & Co modellers estimate insured losses from the same event would top $US200 billion ($310 billion).

Hurricane Andrew, which hit Florida, Louisiana and the Bahamas in 1992, would today cause insured losses above $US100 billion.