Early Estimates Revised: Hurricane Ike Projected Losses Up to $25B
Hurricane Ike is expected to be the third-costliest hurricane in U.S. history, with damage estimates coming in as high as $25 billion.
According to a statement from A.M. Best Co. Inc., despite its high price tag and possible impact on the reinsurance market, Ike is expected to be generally manageable given the industry's current capital strength,
The 250-mile-wide storm made landfall Saturday morning on Galveston Island, Texas, as a strong Category 2 hurricane with winds of up to 110 mph.
Deloitte & Touche L.L.P., a New York-based consulting firm, estimated total insured losses between $20 billion and $25 billion, including flood damage.
Newark, Calif.-based catastrophe modeler Risk Management Solutions Inc. estimated insured losses between $6 billion and $16 billion, not including flood losses.
And Boston-based AIR Worldwide Corp. estimated onshore losses between $8 billion and $12 billion, not including flood losses, with offshore losses between $600 million and $1.5 billion.
These estimates would place Ike as the third-highest hurricane loss in the United States, behind 2005's Hurricane Katrina, which caused $43.6 billion in insured losses, and 1992's Hurricane Andrew, which cost $22.9 billion, according to the Insurance Information Institute. Figures for Katrina and Andrew are in inflation-adjusted dollars.
Published on September 15, 2008
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