Early predictions estimated that insured costs could reach $25 billion to $30 billion from the storm.
Early industry estimates had suggested that Hurricane Matthew insurance losses may be the second highest the country has ever seen. This storm represented the first direct hit the United States has experienced from a hurricane in over ten years. It is still too early to know the total cost of the damage it caused. Estimates had said it could be as high as $25 billion to $30 billion.
This would make the storm the second most expensive hurricane American insurers have ever experienced.
That said, as the first full day of the storm avoided the storm surges that would have led to the highest amount of damage in Florida, Georgia and the Carolinas, estimates have slipped from that early worst case scenario. While the Hurricane Matthew insurance losses have yet to be tallied, it is unlikely that they will approach the $30 billion mark.
By the time the storm left Florida and Georgia, it had been downgraded to a Category 2. While this remained a powerful storm, it had lost some of the initial intensity it brought with it as it bashed its way along the Florida coast.
The Hurricane Matthew insurance losses will still likely be greater than the total for all of 2015.
Just as Hurricane Matthew was about to make landfall, the RMS data modeling firm reported it saw a 42 percent chance that the losses would reach $20 billion. Moreover, there was a 26 percent chance that they could be as high as $30 billion. RMS vice president of capital markets, Ben Brookes, explained that “We have continued to update our guidance as the situation changes.”
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Similarly, a Kinetic Analysis estimate predicted that insurance companies would face losses of about $25 billion. At that level, it would be the second most expensive storm to strike the United States since Hurricane Katrina in 2005.
Analysts from JPMorgan predicted that the property and casualty insurance market would see insured losses ranging from $10 billion to $30 billion. This figure represents the earnings that would be brought in during a full quarter.
The Hurricane Matthew insurance losses may be comparable to those of Hurricane Sandy from 2012. That superstorm struck the northeastern United States and brought $20 billion in insured losses with it.