AIR Updates Insured Loss Estimates for Hurricane Maria
BOSTON, Dec. 6, 2017 — Catastrophe modeling firm AIR Worldwide announced that it has updated its loss estimates for Hurricane Maria. After re-examining Hurricane Maria’s meteorology; analyzing findings from AIR’s damage survey conducted in Puerto Rico in late October; and reviewing the latest information about insurance practices and policies in Puerto Rico, AIR now estimates that insured losses from Hurricane Maria in the Caribbean will be between USD 27 billion and USD 48 billion. Losses in Puerto Rico are estimated at between USD 25 billion and USD 43 billion. AIR Worldwide is a Verisk (Nasdaq:VRSK) business.
The reduction in the high end of AIR’s loss estimates is driven primarily by the review of Maria’s intensity over Puerto Rico. A re-examination of the storm parameters, augmented by newly available reports, revealed lower wind speeds than previously estimated, particularly in and around San Juan, as well as a narrower overall wind footprint.
A significant portion of the AIR modeled losses for Puerto Rico are generated by the industrial line of business, which comprises a wide variety of industries and physical assets. However, it is also the case that the industrial line accounts for much of the remaining uncertainty in the loss estimates, particularly as it relates to business interruption losses. Claims will continue to develop over the course of the next six to eight months, largely as a result of continuing BI losses. Adding to the uncertainty (and to the estimated range of losses) is to what extent demand surge—which is the increase in the cost of labor and materials that is often observed in the aftermath of major catastrophes—will play a role in ultimate insurance payouts.
For additional detail regarding the revised estimates, the considerations that have informed them, and remaining uncertainties, please visit the ALERT website.
About AIR Worldwide
AIR Worldwide (AIR) provides risk modeling solutions that make individuals, businesses, and society more resilient to extreme events. In 1987, AIR Worldwide founded the catastrophe modeling industry and today models the risk from natural catastrophes, terrorism, pandemics, casualty catastrophes, and cyber attacks globally. Insurance, reinsurance, financial, corporate, and government clients rely on AIR’s advanced science, software, and consulting services for catastrophe risk management, insurance-linked securities, site-specific engineering analyses, and agricultural risk management. AIR Worldwide, a Verisk (Nasdaq:VRSK) business, is headquartered in Boston with additional offices in North America, Europe, and Asia. For more information, please visit www.air-worldwide.com.