AIR Worldwide, a risk-modeling firm, said today that after analyzing superstorm Sandy’s characteristics and effects, it now estimates that insured losses from the storm will be between $16 billion and $22 billion. On October 30, the catastrophe-modeling firm projected insured losses of between $7 billion and $15 billion.
AIR said its findings are based on the latest available information on surge height and extent from the U.S. Geological Survey, as well as surface wind-speed observation data and findings from AIR’s postdisaster survey teams.
Estimates include wind and storm-surge damage to onshore residential, commercial, and industrial properties and their contents, automobiles, and time-element coverage (additional living expenses for residential properties and business interruption for commercial properties), AIR said.
“The significant increase in estimated losses from AIR’s estimate issued on Oct. 30, the day after Sandy’s landfall, is driven primarily by an increase in estimated losses from storm surge damage,” Tim Doggett, a principal scientist at AIR Worldwide, said in a statement. “This, in turn, is driven by a reassessment of the percentage of flood losses that will actually be paid, as well as an improved storm surge footprint run against high-resolution industry exposure information.”
Similarly, Swiss Re, a major reinsurer, projects total insured losses from the storm to amount to between $20 billion and $25 billion. The company also reported today that it estimates its own claims burden from the storm to be at $900 million. The amount, however, is “subject to a higher than usual degree of uncertainty and may need to be subsequently adjusted,” according to the company.
On Nov. 1, Eqecat, another modeling firm, doubled its insured loss estimates for the entire insurance industry from a pre-landfall estimate of $5 billion-$10 billion to a post-landfall estimate of $10 billion-$20 billion.
The factors that led to the firm’s revisions include electric and utility losses, subway and tunnel outages, and continued “unknowns,” according to Eqecat, which estimates that the total economic damage wreaked by the storm will hit $30 billion–$50 billion.
In a conference call on November 1, Tom Larson, an Eqecat senior vice president, explained that losses of power contributed to the higher estimates. Of the losses, he said then, 34% will be in New York, 30% in New Jersey, and 20% in Pennsylvania. Other states make up the remaining 16%. He pointed out that the storm has affected almost 15% of the U.S. population.