Initial Estimates Insured Losses from Gustav Range from $2B to $10B

As Hurricane Gustav begins to fade, initial estimates of insured losses are coming in at between $2 billion to $10 billion.  
 
Risk Management Solutions Inc (RMS)., based in Newark, California, said that insured losses from the storm could range between $4 billion to $10 billion. The estimate included both on and offshore losses from wind and storm surge, but not any potential damage to the levees in New Orleans, which were heavily damaged by Hurricane Katrina in 2005 and have not fully been rebuilt, or any flooding from excessive rainfall which might follow the storm in the next few days.  
 
RMS said that insured losses for offshore damage to oil platforms and wells, coupled with losses caused by production losses, could range from $1 billion to $3 billion.  
 
Insured losses from damage to commercial and residential property and business interruption losses could total between $3 billion and $7 billion, the modeling firm said in a statement.  
 
Those figures do not include coverage provided by the National Flood Insurance Program, RMS added. 
 
Boston-based catastrophe modeling firm AIR Worldwide Corp. put initial estimates for onshore property losses in the United States at between $2 billion and $4.5 billion, with the expected loss $3 billion. Those losses do not take into account any flooding that may occur because of the breach of flood defenses, it added.  
 
AIR noted that while offshore exposures in the Gulf of Mexico could result in losses of more than $10 billion, the insured loss is likely to fall between $1.8 billion and $4.4 billion.  
 
Insured losses from the hurricane in the Caribbean are unlikely to exceed $100 million, it added.  
 
Oakland, Calif.-based EQUCAT Inc. said its initial estimate of onshore insured losses from Hurricane Gustav was between $6 billion to $10 billion, primarily in Louisiana.  
 
 

Published on September 2, 2008