September 14, 2012 / 11:11 AM / 5 years ago

RMS sees insured losses from Hurricane Isaac up to $2 billion

London (Reuters) - Hurricane Isaac caused wind damage that could reach $1-2 billion, disaster modeler RMS said in an update on the 2012 Atlantic hurricane season.

This season is proving the second most active since records began in 1851, with only 2005 and 2011 having more named storms as of September 13, the San Francisco-based RMS said.

The first hurricane to hit the United States this year, Isaac struck New Orleans last month, almost exactly seven years after Hurricane Katrina devastated the city, but it proved to be a much less damaging storm.

RMS’ estimate excludes all losses caused by flooding and all losses from the National Flood Insurance Program.

The latter, a state-run entity, was wiped out by Katrina in 2005, requiring a bailout that has left the program with a debt load it may never shift. The program still has 193,000 policies in force in Louisiana alone.

Eqecat, another catastrophe modeling firm whose software is used by the insurance industry, said Isaac caused up to $1 billion in economic losses for offshore energy properties and up to $1.5 billion in insured losses onshore in Louisiana and neighboring states.

Homeowners place their belongings affected by Hurricane Isaac in front of his house as U.S. President Barack Obama tours the Ridgewood neighborhood of LaPlace, Saint John the Baptist Parish in Louisiana, September 3, 2012. REUTERS/Larry Downing

AIR Worldwide put Isaac’s impact at $700 million to $2 billion in insured onshore losses.

Isaac pales in comparison to some previous storms in losses for insurers and reinsurers.

Last year’s Hurricane Irene, the 10th worst hurricane by inflation-adjusted losses, caused about $4.3 billion in losses.

“Seasonal forecasts for 2012, issued at the beginning of August, called for around 14 tropical storms in the Atlantic in 2012,” Dr Christine Ziehmann, director of Model Product Management at RMS, said in a statement.

“The 2012 season is currently on track to exceed these forecasts, especially if September is typical of the 1995-2011 average.”

Only one hurricane of the 2012 Atlantic hurricane season has so far been a major storm, RMS said. Hurricane Michael intensified into a category 3 storm on September 6, but only maintained that status for six hours.

Reporting by Sarah Mortimer; editing by Jason Neely

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