US catastrophe modeling firm AIR Worldwide has forecasted that insured losses from Hurricane Sandy to onshore properties in the US will be in the range of $7bn to $15bn.
The estimation has been made based on the damage to ashore residential, commercial and industrial properties and their contents, automobiles, and time element coverage, including additional living expenses.
For residential lines, estimates reflect AIR’s view that insurers will pay 10% of modeled storm surge damage as wind losses, while for the automobile line 100% of storm surge damage will be paid.
Assuming a 10% take-up rate for commercial flood policies, loss estimate for commercial lines includes insured physical damage to structures and contents, and business interruption directly caused by storm surge.
Business interruption losses include direct and indirect for insured risks that experience physical loss; however, other flood losses are not modeled or reflected in estimates.
AIR’s loss projections do not take into account US offshore assets and non-US property, uninsured properties and extra-contractual obligations among others.
Headquartered in Boston, the firm was set up in 1987, and offers risk models related to natural catastrophes and terrorism in more than 90 countries.