LONDON, U.K. - September 20, 2017 RMS, a global risk modeling and analytics firm, has estimated that the insured loss from Hurricane Irma will be between $35 and $55 billion. This estimate represents the insured losses associated with wind, storm surge, and inland flood damage across Florida and the southeast United States (including losses to the National Flood Insurance Program). It also includes insured loss associated with wind and storm surge in the Caribbean.
RMS Best Industry Loss Estimate by Peril and Geography, in US$ Billions
RegionTotal Insured Losses (including to NFIP)Total Economic Losses
United States25 - 3535 - 50
Caribbean10 - 2025 - 45
Total35 - 5560 - 95
Included in the industry estimate are losses to the National Flood Insurance Program of $2.5 to $5.5 billion that will add to the $7-10 billion estimated from Hurricane Harvey that occurred two weeks earlier.
“In the U.S., the losses from Irma will be significant and many communities have been severely disrupted. But had the hurricane made a direct impact on Tampa, the biggest city on Florida’s west coast, the losses would have been much higher. However, while the majority of Irma’s losses will come from Florida, it’s important not to overlook the Caribbean where several islands were devastated,” said Michael Young, RMS head of product management for U.S. climate models.
RMS expects both uninsured rainfall-driven flood losses in the U.S., and uninsured wind and storm surge losses in the Caribbean to be significant. Therefore, the overall economic losses will be substantially higher, according to the RMS estimate: between $60 and $95 billion.
One key driver of uncertainty in the Florida loss will be the extent and impact of demand surge from insureds, as Hurricane Irma affected nearly the entire peninsula with huge amounts of property exposure.
Hurricane Irma was the eighth named storm of the 2017 North Atlantic hurricane season. It was the first major hurricane (Category 3 or greater) to make landfall in Florida since Hurricane Wilma in 2005. It made landfall first in the Florida Keys on September 10, and later the same day at Marco Island, south of Naples. Prior to reaching the U.S. mainland, Irma hit several Caribbean islands, at times with sustained winds estimated by RMS HWind to have reached 188 mph, making it one of the most intense Category 5 intensity storms on the Saffir-Simpson Hurricane Wind Scale.
RMS Average 3-Second Peak Gust Wind Ensemble Footprint of Hurricane Irma
Given that the Caribbean has a lower rate of insurance take-up than the U.S., insured losses will constitute a fraction of the region’s total economic losses. Nonetheless, RMS estimates insured wind losses will be very significant for the Caribbean: between $10 and $20 billion, with five islands catastrophically impacted and high loss ratios.
For this loss estimate, the wind and storm surge extent was simulated using version 17.0 RMS North Atlantic Hurricane Models and RMS ensemble footprints, which are hazard reconstructions of Irma’s windfield and storm surge.
The new RMS® U.S. Inland Flood HD Model was also used to simulate the precipitation, run-off, and pluvial and fluvial flows across Florida and the southeast United States, using advanced hydrological/hydraulic models to simulate the flow of water over land.
In addition, RMS reconnaissance teams conducted detailed analysis of damage on the ground in Florida, helping to validate our modeling of the hurricane.