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RMS estimates Hurricane Ida losses at $34-47 billion

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Hurricane Ida onshore and offshore insured losses could reach $US25-35 billion ($34-47 billion), catastrophe modelling firm RMS estimates.

The estimate includes National Flood Insurance Program losses in Alabama, Florida, Louisiana and Mississippi of $US2.3-4 billion ($3.1-5.4 billion) and offshore platform, rig and pipeline losses of $US700 million to $US1.5 billion ($950 million to $2 billion).

“Ida was truly a multi-faceted event in terms of hazard and loss impacts,” RMS North Atlantic Hurricane Models Senior Product Manager Jeff Waters said.

“From a wind perspective, this storm was a design level event, where observed wind speeds often exceeded speeds that buildings have been designed to withstand, particularly in the hardest hit areas in southern Louisiana.”

Ida made landfall near Port Fourchon on Sunday, August 29 as a category 4 hurricane, producing sustained winds of 150 miles per hour (241 km/h), according to the National Hurricane Centre.

The hurricane caused extensive damage in Gulf of Mexico states before bringing torrential rain and flooding to other parts of the country as it travelled to the northeast.

The RMS initial figure excludes wind and inland flooding impacts in the Ohio Valley, Mid-Atlantic and Northeast US, with estimates for those regions still being assessed.

Significant specialty line impacts are expected given Louisiana electricity grid damage and the high concentration of petrochemical plants, refineries, marine cargo and port exposures, power plants and other industrial facilities in the state’s south.

“With prolonged anticipated recovery times, we expect material business interruption losses to these lines on top of varying degrees of infrastructure damage they sustained,” Chief Risk Modeling Officer Mohsen Rahnama said.

Aon says Ida is expected to be among the costliest hurricanes to impact the US mainland with total direct economic losses expected to reach will into the tens of billions of dollars, and with public and private insurance entities facing significant exposures despite a sizeable amount of coastal and inland flooding damage not insured.

Larger-scale disasters occurring with more intensity and resulting in greater impacts are putting a spotlight on areas where gaps lie in humanitarian and insurance protection, whether countries are identified as developed or emerging, Aon Impact Forecasting team Catastrophe Insight Head Steve Bowen says.

“Hurricane Ida’s catastrophic impacts in the US highlighted how much work is yet to be done to better insure around inland and coastal flooding,” he said.

Aon says other catastrophe events last month included major wildfires in Greece, which began in late July, wildfires in Algeria, flooding and landslides in Turkey’s Black Sea region and a continuation of the worst drought in 91 years in Brazil.