New York – Hurricane Katrina is likely to result in at least $34.4 billion in personal- and commercial-property loss claims, according to the first publicly released survey of the nation’s insurers.
ISO’s Property Claim Services Unit said Tuesday that the preliminary estimate of damages to homes and businesses in six states would make Katrina the most costly U.S. natural disaster ever, surpassing the inflation-adjusted $20.8 billion in losses from Hurricane Andrew in 1992.
Several risk-assessment companies earlier released projections of insured losses from Katrina, with totals ranging from $14 billion to $60 billion.
The ISO’s tally includes anticipated insurance industry losses for personal and commercial property, including boats and vehicles, business-interruption coverage and additional living expenses. Reported damage to insured onshore oil facilities is included, ISO officials said.
The estimates exclude losses to utilities, agriculture, aircraft, offshore drilling platforms and property insured under the federal flood insurance program.
Also Tuesday, the Securities and Exchange Commission said it was easing rules for insurance companies to raise capital, responding to concern that the billions of dollars of losses from Katrina and Hurricane Rita could make it harder for the insurers to pay victims’ claims.
The losses could drain capital and cash from the companies. In relaxing the rules for them to tap into the capital markets, the SEC “recognized that the risk is out there for the industry,” said Keith Buckley, a group managing director at Wall Street credit agency Fitch Ratings.
ISO, an insurance risk and data firm based in Jersey City, N.J., said that policyholders in the six affected states – Louisiana, Mississippi, Alabama, Florida, Tennessee and Georgia – were expected to file more than 1.6 million claims for damage to personal and commercial property, automobiles, boats and yachts.
“The personal-property loss claims include nearly 75,000 boats and yachts in the affected states, with an estimated insured value of slightly under $2 billion,” the ISO report said.
