Total estimated insured losses from Hurricane Michael have reached more than $2.1 billion, according to the most recent data from the Florida Office of Insurance Regulation.
The current number of claims from Hurricane Michael, a Category 4 storm that hit the Florida Panhandle before continuing a path of destruction through several other Southeast states, had reached 110,183 with 26.1 percent of that total number of claims closed as of Oct. 30, 2018. OIR compiled aggregate information from claims data filed by insurers covering all claims based on filings received.
The lines of business included in the total number of claims are residential property, commercial property, private flood, business interruption and miscellaneous other lines.
Residential property losses account for the majority of the total claims at 78,045 – 57,088 of that number is homeowners claims. Only 20.7 percent of residential property claims were closed as of Oct. 30.
The percentage of commercial property claims closed was lower at 10.3 percent of the 4,471 claims received. Only 460 business interruption claims had been filed so far, with 9.1 percent of those closed to date.
Just 64 flood claims had been filed as of Oct. 30, with 37.5 percent of those claims already closed.
The Florida Department of Financial Services said in a statement Wednesday that Citizens Property Insurance Corp., the state insurer of last resort, had 3,231 claims as of Oct. 29.
The number of claims will continue to be updated by OIR, which began requiring insurers to submit data on Oct. 12 with additional data calls scheduled to occur daily through Nov. 2, 2018.
Catastrophe modeling firms have estimated the total cost of Hurricane Michael claims will range from $4.5 billion to $10 billion. Those numbers include losses in Florida, as well as several other states that were impacted by the storm.
Karen Clark & Co. estimated private insured losses from Michael could approach $8 billion. Catastrophe risk modeling firm AIR Worldwide said its industry insured loss estimate resulting from Hurricane Michael’s winds and storm surge will range from $6 billion to $10 billion. CoreLogic estimated losses could reach $4.5 billion.
While losses will be substantial, industry experts and ratings firm say they are not enough to cause problems for insurers or impact the Florida insurance market. Most losses will be paid by companies’ reinsurance programs.
Ohio-based ratings firm Demotech, which rates 52 Florida-based insurers as well as others in surrounding states affected by Michael, said these companies are well positioned to handle losses. “Demotech believes that each of the carriers that we review and rate that are exposed to loss and LAE from Hurricane Michael have in place a rigorous and vigorous catastrophe reinsurance program,” Demotech President Joseph L. Petrelli told Insurance Journal.
Howard Mills, Global Insurance Regulatory leader of Deloitte, said Michael was the most powerful storm to ever hit the Florida Panhandle, but, “it’s not going to be a market moving storm.”
He said the insurance industry and the global reinsurance industry are “very well capitalized … there are hundreds of billions of dollars in capital and surplus and they are well positioned to handle this storm.”