Insurers are facing mounting claims as the swollen Mississippi River continues to inundate low-lying areas.
Cat modelling firm AIR Worldwide said in a statement, due to a lack of information, “estimates of total industry-wide insured flood values remain hard to obtain.”
But according to Munich Re figures, similar floods in 1993 cost the industry $1.27bn, which AIR estimated would amount to $2.6bn after accounting for exposure growth and inflation.
“Given the magnitude of this event, it is clear that there will be significant commercial losses when compared to the last great flood on the Mississippi, in 1993,” the statement added.
Meanwhile, the US government could face claims bills in excess of $500m, with many homeowners utilising the National Flood Insurance Program (NFIP).
The governors of both Mississippi and Louisiana warn farmers and residents of waterfront communities to be ready to evacuate in preparation for major flooding along tributaries and spillways as the swollen river pushes record amounts of water towards the Gulf.
AIR’s principal scientist Dr Boyko Dodov said: “At its height Tuesday, the river was moving at 2 million cubic feet per second and was about three miles wide—roughly three times wider than normal.”