KCC pegs Isaias insured losses at $3 billion; AM Best sees an earnings event

Karen Clark & Co. estimates privately insured losses from Hurricane Isaias at about $3 billion. The Oct. 15 report covers residential, commercial and industrial property, vehicles and business interruption and excludes National Flood Insurance Program losses; the hurricane came ashore near Destin on Oct. 9 as a Category 2 storm.

AM Best said the Category 2 hurricane will likely prove an "earnings event" for insurers. Losses will be well below the level that would make Isaias a capital or solvency event, and the storm is "not expected to significantly deplete surplus levels in a way that alters industry-wide capacity within the state, thereby avoiding any squeeze that would otherwise lead to a pricing surge," the rating agency said.

Florida's Office of Insurance Regulation had not released claims data as of Thursday morning. The loss figures therefore arrive as estimates rather than results. Carriers have reported thousands of claims received.

Wind structure limited the damage. AM Best noted the strongest winds blew on the western side of the storm, pushing water away from the coast and curbing surge and flood losses. Winds of 105 mph to 117 mph were recorded near the western eyewall around Pensacola, while Panama City Beach, about 90 miles east, saw 5.6 feet of surge, Gallagher Re reported. Inland flooding reached from Alabama to the Carolinas, and 21 tornadoes were confirmed across the Southeast.

The $3 billion is comparable to Hurricane Idalia, the Category 3 that made landfall on a less-populated part of the Florida Panhandle in 2023. Idalia brought storm surge of as much as 12 feet in places, according to the National Weather Service; Hurricane Ian, the Category 5 that raked southwest Florida in 2022, produced an estimated $56 billion in insured losses.

The Sept. 2 Toronto storm, sized by Gallagher Re at hundreds of millions, was judged small enough to leave ILS capital unmoved. Isaias is about a twentieth of Ian's insured loss.