While the U.S. property-casualty sector is considered flush with cash, its stocks have seen a 5% decline since news of Sandy’s potential destruction hit. And according to one Morgan Stanley analyst, the industry could see its earnings fall by 26%.
Disaster modeler Eqecat is forecasting losses for private insurers of up to $15 billion. Some estimates put that number at $20 billion. Those estimates do not include payouts from the National Flood Insurance Program (NFIP), which is administered by FEMA.
State Farm Insurance, the largest homeowner policyholder along the eastern seaboard, has seen about 24,500 claims since the storm. Most of those claims are in New York, with 7,500, followed with 5,000 in New Jersey and another 1,500 in Virginia.
Writers of federal flood premiums last year had $342.8 million written in the tri-state area, while the property-casualty industry as a whole in 2011 wrote $2.8 billion in federal flood direct premiums, according to SNL. Of the coastal areas hardest hit by Sandy, about 90% of the coastal housing properties in Ocean City, Md. are insured, while 1% of the coastal housing properties in New York are.
Commercial properties, meanwhile, are only insured through the federal program for up to $500,000 in losses. And auto losses are not covered through the NFIP.
FEMA’s flood program, meanwhile, has at least $45 billion in policies in the tri-state area. But the agency may not have enough to cover claims made through the NFIP, as it still owes the U.S. Treasury about $18 billion from Hurricane Katrina losses.
A look at the numbers
New York City has about $2.7 trillion in coastal properties insured through the federal flood program. Neighboring New Jersey, meanwhile, had 230,708 flood policies written as of September 2011 with an insured value of $706.5 billion in 2012.
Farther south in Delaware, the national flood program has about 25,000 policies insuring $60.6 billion, as of 2007. Washington, D.C., has 2,128 policies, while Maryland has 70,200 insuring $17.1 billion in coastal properties.
Mike,
5.9 billion sound like a pittance compared to the above, and nothing is even mentioned about the loss of business revenue, wages, etc.