Insurers face at least $1bn payout for Maui wildfires
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Insured losses for the wildfires on Hawaii’s Maui Island last week have been estimated to reach at least $1bn, but it will take weeks or months to determine the magnitude of insured damages, according to Moody’s Investors Service.
Property and casualty insurers with significant homeowners and commercial property market share in the town of Lahaina are likely to be most affected, added the ratings agency.
Moody’s said: “Given the damage assessment and Lahaina's relatively high $1.5m average single-family home value, we estimate insured losses will be at least $1bn.”
Primary insurers such as State Farm, Tokio Marine and Allstate have exposure to Hawaii, but the ratings agency expected that large carriers “will readily absorb the losses given that business in Hawaii is a small fraction of their overall insured portfolios”.
Moody’s added: “These firms have considerable resources to withstand catastrophe events given their careful monitoring of exposures, geographic diversification, high quality reinsurance protection and strong capital bases.”
Source: Moody's. Source: Moody's.
In addition to homeowners and commercial property, the agency expects losses in personal watercrafts and comprehensive motor cover.
Moody’s, with its risk modelling subsidiary RMS, is one of the first companies to produce an initial loss estimate.
Meanwhile, Karen Clark & Co said last week that insured losses would be “the second largest in Hawaii’s history” — second only to Hurricane Iniki in 1992, based on today’s property values.
“The measure will help insurance companies and adjusting firms handle the volume of claims that is anticipated as a result of the wildfires that ravaged the islands of Maui and Hawaii County,” said the insurance division of the Department of Commerce and Consumer Affairs.
What is the impact of the Maui fires on reinsurers?
