Friday, November 23, 2012
PCS Says $11 Billion Sandy Claims So Far, Below Expectations
PCS reports that insurance claims for Sandy are only $11 billion. This is good news for casualty insurance companies and holders of catastrophe bonds (which don't pay off as much if a catastrophe happens). More broadly, the lower-than-expected number (Eqecat said it expected $20 billion in insured losses) could mean a number of things: - Huge losses are uninsured, which is quite possible because so much of the hit was taken by individual homeowners near water. Those properties are difficult and expensive to insure, which means many homeowners self-insure. - The Federal flood insurance program (FIMA, part of the FEMA system) may be getting many claims. - States and localities will be filling in to repair damage and take care of people made homeless and the costs will be filed with FEMA. - Homeowners may be slow to file claims. Or the Eqecat original estimate was too high. It was the basis for an economic-loss estimate of $50 billion that has been widely reported. NY Governor Andrew Cuomo has estimated $33 billion cost for New York State. NY City Council Speaker Christine Quinn used an estimate of $26 billion losses for New York City, after Gov. Cuomo released his estimate; her figure presumably is scaled to fit inside the statewide number. Still no estimates for New Jersey. Governor Chris Christie said he expected to release them by Wednesday, November 21. No sign yet in Googledom of these numbers. FEMA has been releasing data on the number of homes that have been damaged in any way.