RMS: Up to $35B in Gulf Region Onshore, Offshore Insured Losses From Ida

Catastrophe risk specialist, RMS, estimates onshore and offshore U.S. insured losses from Hurricane Ida in the Gulf of Mexico region to be between $25 billion and $35 billion.

RMS’ estimate includes losses to the National Flood Insurance Program (NFIP) in the four impacted Gulf Coast states (Alabama, Florida, Louisiana and Mississippi) in the range of $2.3 billion to $4 billion. It excludes wind and inland flooding impacts in the Ohio Valley, Mid-Atlantic, and Northeast U.S. regions, which RMS says it will communicate once the full extent of damage is known.

Hurricane Ida struck the Louisiana coast near Port Fourchon on Aug. 29 as a Category 4 storm with 150 mile per hour maximum sustained winds.

Onshore and offshore insured loss estimates for Hurricane Ida ($ billions) in the Gulf Coast states:

Source: RMS

This estimate includes wind, storm surge, and inland flood losses across only the impacted Gulf states in the landfall region — Alabama, Florida, Louisiana and Mississippi — based on analysis of RMS ensemble footprints in Version 21 of the RMS North Atlantic Hurricane Models and estimates from the RMS U.S. Inland Flood HD Model. RMS ensemble footprints are reconstructions of Ida’s hazard that capture the uncertainties surrounding observed winds and storm surge.

“Ida was truly a multi-faceted event in terms of hazard and loss impacts. RMS virtual reconnaissance efforts and analysis of aerial imagery show widespread wind and water-related damage in Louisiana and neighboring Gulf Coast states, including many severe or total structural losses. From a wind perspective, this storm was a design level event, where observed wind speeds often exceeded speeds that buildings have been designed to withstand, particularly in the hardest hit areas in southern Louisiana. Many areas impacted by Ida’s winds were also impacted by storm surge, precipitation-induced flooding, and the hurricane events of 2020. In these instances, loss attribution and differentiation may become more complex, leading to longer claims settlement periods,” Jeff Waters, senior product manager, RMS North Atlantic Hurricane Models, said in a media release.

Losses reflect property damage and business interruption to residential, commercial, automobile, industrial, infrastructure, marine cargo and specie, watercraft and other specialty lines of business, along with post-event loss amplification (PLA) and non-modeled sources of loss.

The $2.3 billion to $4 billion estimate of NFIP losses in Gulf Coast states was derived using RMS’ view of NFIP exposure based on 2019 policy-in-force data published by FEMA, the Version 21 North Atlantic Hurricane Models, and the U.S. Inland Flood HD Model.

RMS expects insured wind losses in this event to be driven by residential lines, and insured water-related losses to be dominated by commercial and industrial lines.

Additionally, RMS estimates insured losses to offshore platforms, rigs and pipelines in the Gulf of Mexico to be between $0.7 billion and $1.5 billion from wind and wave-driven damages. Offshore losses are based on the August 2021 vintage of the RMS Offshore Platform Industry Exposure Database.

“Ida damaged many offshore platform-related hubs and staging facilities in coastal Louisiana, including Port Fourchon. As a result, more than 90 percent of the Gulf of Mexico oil and gas production is still shut-in, representing approximately 15 to 20 percent of the U.S. total fuel supply. Offshore damage surveys to date, reviewed by the RMS Geospatial Analysis team, indicate wind and wave-driven damage to several high-valued platforms. Inspections and damage assessments are still ongoing, so, it’s likely we won’t know the full extent of loss to this sector for several weeks. However, as Ida tracked quickly through the Gulf, the lower than expected wave heights are expected to limit physical damage to rigs and platforms,” Rajkiran Vojjala, vice president, Model Development, RMS, said.

Hurricane Ida was the ninth named storm of the 2021 North Atlantic hurricane season, the fourth hurricane, and the fifth named storm to make landfall in the U.S. this season. Ida was also the fourth hurricane to make landfall in Louisiana since 2020, following Hurricanes’ Laura, Delta, and Zeta. Over two months still remain in the 2021 North Atlantic hurricane season, officially ending on November 30.

Source: RMS

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