Moody’s RMS puts Hurricane Debby US private market insured loss at less than $1.5bn

The U.S. private market insurance industry loss from Hurricane Debby is not expected to exceed $1.5 billion, while losses to the National Flood Insurance Program (NFIP) from the event will be less than $300 million, according to Moody’s RMS Event Response.

Hurricane Debby was the fourth named storm of the 2024 North Atlantic hurricane season and the second hurricane, and made landfall as a Category 1 hurricane near Steinhatchee, Florida on Monday, August 5th. Debby was a slow moving storm which caused excessive rainfall and widespread pluvial and fluvial flooding.

The up to $1.5 billion estimate from Moody’s RMS Event Response includes insured losses associated with wind, storm surge, and precipitation-induced flooding.

The cat risk modeller states that estimated losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, and consider sources of post-event loss amplification and non-modeled sources of loss.

Moody’s RMS Event Response expects insured losses to be absorbed by the NFIP, especially in coastal parts of Florida, Georgia, and the Carolinas, where take-up rates are higher, as well as the private market.

“However, we expect a sizable amount of uninsured flood losses from this event, particularly in non-coastal areas where NFIP take-up is much lower,” said Jeff Waters, Director – North Atlantic Hurricane Models at Moody’s.

“Hurricane Debby should not be a major event for the (re)insurance market. Debby made landfall just 10 to 15 miles (16 to 24 kilometers) from last year’s Hurricane Idalia’s Florida landfall as a Category 3 hurricane. So, there is certainly some overlap of the exposures affected by both events.

“Recovery is still ongoing in some of those affected areas, but in many cases, we expect the repaired roofs to fare better with Debby, as they now reflect more recent, stringent building codes.

“Events like Debby continue highlighting the potential damage from water, notably storm surge and precipitation-induced flooding, and the need to model those sources of loss effectively when quantifying hurricane risk,” said Waters.

This is the first insured loss estimate from cat risk modellers for Debby, although reinsurance broker Gallagher Re said recently that wind and water-related insured losses from the private insurance market and NFIP will likely fall in the range of $1-2 billion.

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