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Too soon to estimate cost of Sandy

Friday, November 02 14:44:47

The damage from the powerful storm Sandy is so widespread that it is too soon to estimate losses, a leading disaster assessment firm, RMS, said today, in contrast to rivals projecting possible insured losses of $7 billion to $20 billion.

Evidence was mounting that the storm that hit the northeastern United States on Monday, including the biggest city of New York, caused severe damage in some areas, Risk Management Solutions (RMS) said in a statement.

"The event is still live and several variables are yet to play out, consequently, it remains too early to provide a reliable estimate of the total insured losses," Claire Souch, RMS vice president of model solutions, said.

The firm's two main rivals and peers used by the insurance industry to forecast losses from disasters, Eqecat and AIR Worldwide, have both issued preliminary estimates.

AIR projected insured losses at $7 billion to $15 billion and on Thursday, Eqecat raised its initial estimate to between $10 billion and $20 billion. Both firms exclude residential flood losses from their estimates, as those are covered by the federal government's National Flood Insurance Program.

The largest underwriter in that program estimated on Thursday that the Federal Emergency Management Agency would receive at least 80,000 claims from Sandy. Assuming the damages are similar to those caused by Hurricane Irene last year, that would imply a total loss of around $2.4 billion.

All combined, that would make Sandy the second-costliest catastrophe recorded in the United States, behind Hurricane Katrina, which devastated New Orleans in 2005.