RMS Expects Economic Loss to Exceed $100 Billion
from Hurricane Katrina and the Great New Orleans Flood
from http://www.rms.com/NewsPress/PR_090205_HUKatrina.asp
Initial Hurricane Storm Surge Leads to Second Flooding Catastrophe When Levees are Breached in New Orleans
Newark, Calif. – September 2, 2005 – Risk Management Solutions today announced that the economic loss from Hurricane Katrina and subsequent flooding in New Orleans is expected to exceed $100 billion. Losses are resulting from two separate catastrophic events: first, the landfall of Hurricane Katrina in southeast Louisiana and coastal Mississippi on August 29 causing extensive wind and coastal surge damage; and second, the Great New Orleans Flood which has resulted from failure of the levee systems that protect New Orleans. At least 50% of total economic loss is expected to come from flooding in New Orleans, in addition to hurricane losses from wind and coastal surge, infrastructure damage, and indirect economic impacts. RMS issued preliminary insured loss estimates of up to $25 billion on Monday for Hurricane Katrina, prior to evidence of levee failure and flooding in New Orleans that was reported on Tuesday, August 30.
The 2005 Great New Orleans Flood has developed into the most damaging flood in U.S. history. RMS currently estimates that at least 150,000 properties have been flooded, surpassing the previous U.S. record from flooding and levee failures on the Lower Mississippi river in 1927, which inundated 137,000 properties. Hurricanes of category 4 or 5 strength are well-understood to occur in this region of the country, yet the levee system in New Orleans was designed only to protect against a category 3 strength storm. The insufficient level of flood protection offered by the city’s levees has been exacerbated by shortcomings in preparedness.
According to the 2005 RMS® U.S. Industry Exposure Database, insured value in Orleans parish alone is nearly $40 billion, and total value in the 7 parishes surrounding the city is over $110 billion. This property is not only susceptible to wind damage, but severe flooding that could result from storm surge breaching the levees that surround New Orleans.
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Earlier this morning - before the flood damage was assessed
RMS Increases Insured Loss Estimate for Hurricane Katrina to $20-$35 Billion
Insured Losses from Levee Breaks in New Orleans Still Under Evaluation
Newark, Calif. – September 2, 2005 – Estimated insured losses from Hurricane Katrina’s direct impact have increased to $20-$35 billion, as announced by today Risk Management Solutions (RMS), the world’s leading provider of products and services for the management of catastrophe risk.
On August 29, the day of Katrina's landfall, RMS was projecting $10-25, but that was before New Orleans flooded.
August 26, 2005 - Risk Management Solutions (RMS), a provider of products and services for the management of catastrophe risk, said that insured losses from Hurricane Katrina's first landfall in the U.S. are likely to range from $1 to $2 billion, based on current information on landfall location and wind speeds. Additional losses are expected from Katrina's second landfall, which is forecast to occur on Monday, August 29.
Well we will just have to wait and see, and that will take a year or more, and that assumes no other hurricane comes along.
