EQECAT says damages from Sandy will be on lower end of estimates
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As Hurricane Sandy headed north after inundating parts of New York City and coastal New Jersey Tuesday, EQECAT Inc. lowered its damage estimates to $5 billion in insured losses and $10 billion in economic damages.
Before the storm hit on Monday, the Oakland, Calif.-based catastrophe risk modeling firm had estimated that insured losses would be between $5 billion to $10 billion and economic damages would be between $10 billion to $20 billion.
“Recent events have demonstrated a pattern that approximately half of the economic damages are covered by private insurance companies, with the remainder covered by NFIP or uninsured and borne by the property owners,” the company said in a release. “Based upon this pattern, insured losses could be $5 billion.”
With New York City declared a major disaster areas and transportation tunnels flooded, the modeling firm expects widespread damage. “Economic damages include property damage from wind, rain and flood, and also include intangibles such as business interruption and additional living expenses,” the release said. “Damage to infrastructure utilities include roads, water and power, and municipal buildings which may or may not be insured.”
Insurance companies have repositioned claims personnel and equipment ahead of the storm. Chicago-based CNA Financial Corp. opened a catastrophe operations center within its Nashville, Tenn., office in preparation for handling anticipated claims from Sandy.
Joe Picone, Richmond, Va.-based chief claim officer, North America for Willis Group Holdings P.L.C., said his team was gearing up for an influx of claims in the storm's wake but said an accurate assessment would take time. “We have 100 people on standby with extensive property claims experience, we have a team of 14 complex property adjusters on standby as well,” he said. “The bulk of the claims we expect to be reported will likely come on Thursday and Friday and the bulk of next week.”
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