Hurricane Irma may be distracting from a potential Hurricane Harvey fallout
While attention is focused to Hurricane Irma, the most powerful storm to have lashed Florida in recent years, Hurricane Harvey could be the wild card, from a reinsurance perspective, because of the extensive flood damage caused around the US city of Houston, the biggest in the state and the fourth-most populous in the country.
So thinks Tom Johansmeyer, assistant vice president, Property Claim Services (PCS), part of Verisk Insurance Solutions. He noted that PCS, which provides data for the catastrophe bond market, had to publish nine extensions for Harvey concerning the dates involved and the US states affected.
Johansmeyer said: “Irma is a big storm, but it’s also a straight-forward cat, and relevant for the normal reasons. Harvey is the more interesting event of the two because it is not straight-forward.”
He noted that for US flood cat events the biggest line can be counted to be personal property, the bulk of which goes to the US National Flood Insurance Program (NFIP). However, US auto will also take a major hit from the deluge, and Johansmeyer thinks that the size of the NFIP figure will give an indication of the claims bill from cars submerged by the rain waters.
“A big question is that for these people claiming on NFIP property policies, are they also likely to have above average auto cover in place,” he added.