Insured Loss from Barry Not Likely to Be More Than $500M: RMS

Insured losses from Hurricane Barry probably won’t rise above $500 million, global risk modeling and analytics firm, RMS, says.

The RMS estimate represents insured losses from wind, storm surge and inland flood damage, including losses to the National Flood Insurance Program (NFIP).

Hurricane Barry was the second named storm of the 2019 North Atlantic hurricane season. It made landfall on July 13 near Intercoastal City, Louisiana, as a Category 1 hurricane with maximum sustained winds of 75 mph.

Jeff Waters, senior product manager of the RMS North Atlantic Hurricane Models, said in a statement that sustained hurricane-force winds were experienced only in a small section of the southern Louisiana coastline. However, Holly Widen, Global Climate product manager at RMS, said Barry “ended up producing more than 23 inches in southwest Louisiana and 13 to 14 inches in portions of Mississippi and Arkansas.”

Much of the Barry-caused flooding occurred across less populated areas of the lower Mississippi River valley, Widen said. “Thus, flood-driven losses are now expected to be lower than initially anticipated.”

RMS’s U.S. Inland Flood High Definition (HD) Model used observed rainfall accumulations for Barry to simulate the runoff, river discharge and consequent flood inundation across the impacted region.

RMS’s estimate included insured losses from property damage and business interruption from wind, storm surge-driven coastal flooding, and inland flooding

Storm surge losses include the impact of coverage leakage, an escalation in claims severity for wind-only policies in instances where wind and water hazards co-exist for residential lines of business.

RMS expects NFIP losses to represent approximately half of the total insured loss estimate. Louisiana has the third highest number of NFIP policies-in-force in the U.S., many of which cover areas impacted by storm surge or inland flooding from Barry.

Earlier loss estimates from the storm have ranged from around $300 million to $900 million.

Catastrophe modeling firm Karen Clark & Company (KCC) in mid-July said insured losses would likely come in at close to $300 million, a figure that does not include NFIP losses. KCC based the estimate on its high-resolution US Hurricane Reference Model. The estimate includes privately insured wind and storm surge damage to residential, commercial, and industrial properties and automobiles.

Property information and data analytics provider, CoreLogic, estimated the cost of insured and uninsured losses would range between $500 million and $900 million. Those figures include estimated NFIP losses.