Hurricane Dorian losses will be in the billions

Hurricane Dorian hits

Global risk modeling and analytics firm RMS has estimated that insured losses from the devastation wrought by Hurricane Dorian will be in the billions for the Caribbean, and potentially for the US as well

RMS estimates that the Caribbean faces insured losses of between US$3.5 and $6.5 billion, most notably in the Bahamas, which was the hardest hit by the devastating storm. In fact, nearly all of the losses are accounted for by the Bahamas, with property damage and business interruption leading to major expenses across multiple lines.

“There is a high degree of uncertainty on the potential impact of post-event loss amplification from this event,” commented Jeff Waters, Senior Product Manager for RMS North Atlantic Hurricane Models. “Nevertheless, we expect post-event loss amplification in the Bahamas to be significant due to constrained access to the islands and infrastructure damage. Port closures, damaged roads, and severe damage to the airport will make it difficult to deliver the necessary labour and materials to impacted areas. It will also limit the ability of residents and business owners to return to damaged homes and buildings. Consequently, cost of materials is expected to inflate, and repairs could be prolonged, both of which are expected to amplify the cost of the claims from this event.”

In the US, meanwhile, RMS estimates that insured losses from Dorian will fall somewhere between $500 million and $1.5 billion. This includes losses sustained by the National Flood Insurance Program.

“While Dorian caused material damage in several states, the overall impact to the US could have been much worse had the storm taken a different track,” added Waters. “We were fortunate that the majority of Dorian’s damaging winds and storm surge remained offshore as it tracked along the US coastline, before weakening, and eventually making landfall in North Carolina.”

Thousands of people remain missing in the Bahamas as post-Dorian clean-up efforts continue; these efforts have been hampered, however, by heavy rain and strong winds from Tropical Storm Humberto, which hit the stricken region on 13 September.