Up to $30 bn in insured damages from Hurricane Harvey: Munich Re

 10 Sep 2017 - 18:36

Up to $30 bn in insured damages from Hurricane Harvey: Munich Re
Mitigated flood damaged contents of a small business complex waits to be carted away following the aftermath of tropical storm Harvey in Katy, Texas, U.S., September 9, 2017. REUTERS/Mike Blake

AFP

Monaco: Hurricane Harvey, which lashed Texas and Louisiana with unprecedented rain last month, could end up costing insurers between $25 and $30 billion (21 and 25 billion euros), German reinsurance firm Munich Re estimated on Sunday.

"It is a big estimate. The cost could climb a little bit, but not much," said Torsten Jeworrek, a member of Munich Re's management board, during at an insurance conference in Monaco.

Damage estimates for Hurricane Harvey, which made landfall in Texas on August 26 before returning out to sea to then lash Louisiana, vary from around $50 billion to well in excess of $100 billion. 

However not all property was insured or fully insured. 

Property insurance policies in the United States don't cover floods. Many homeowners don't take out separate flood insurance from the government, while the amounts available aren't always sufficient for businesses.

Houston and the surrounding areas saw massive flooding that not only damaged homes and cars, but also roads and bridges.

"The evaluation of losses is complex due the prevalence of flooding," said Jeworrek.

"It will take a long while, not just a few days or weeks, buy maybe months or even a year for the loss figures for the entire sector to be reliable and stable," he added.

He said insurers would likely support most of the costs, and that reinsurers would probably not be hit hard. 

Reinsurers provide insurance to insurance companies which need to spread the risks of the policies the provide to clients.

A total of 42 people died in Hurricane Harvey.