PCS estimates Harvey NFIP losses at nearly $820 millionPosted On: Oct. 6, 2017 1:29 PM CST
Property Claim Services plans to publish aggregate flood loss information supplied by the National Flood Insurance Program beginning with data from Hurricane Harvey, which devastated Houston in late August.
The NFIP has received more than 87,000 claims and incurred more than $819 million in losses related to Hurricane Harvey as of Sept. 26. In Florida, Georgia, and South Carolina, the NFIP has received 23,000 claims and incurred losses of $15.8 million so far related to hurricanes Harvey and Irma, PCS said.
For hurricanes Harvey, Irma and Maria as well as future events, the NFIP will report claim totals and incurred losses, rather than projected ultimate losses, in accordance with the PCS reporting cycle. PCS will publish NFIP losses only for PCS-designated catastrophe events.
Hurricane losses historically have been excluded from industry insured loss estimates by PCS, the business unit of Jersey City, New Jersey-based insurance data analytics provider Verisk Analytics said Thursday. Including NFIP data will provide a fuller view of catastrophe losses across the country, PCS said.
The announcement comes in the wake of a failed effort in Congress last month to pass a provision to clarify that mortgage lenders could accept private flood insurance in lieu of federal coverage to satisfy a mandatory purchase requirement. The failure highlighted the ongoing difficulty of reforming the NFIP despite its mounting debt and bipartisan recognition of the need for reform.
The collaboration between PCS and NFIP will bolster risk and capital management regarding flood risk in the United States, especially in light of the NFIP’s decision to secure reinsurance protection earlier this year, by adding a new area of support for the global insurance and reinsurance industry, the company said.
"We see this as an opportunity to better integrate with the insurance industry," Roy E. Wright, director of the NFIP, a Federal Emergency Management Agency program, said in a statement Thursday. "This better understanding of flood losses is in the interest of FEMA and our private sector partners. It can deepen the understanding of flood risk as the industry explores broader use of private lines in this space."
The benefits of the combined effort reach beyond risk transfer, said Ted Gregory, director of PCS.
“With Hurricanes Harvey, Irma and Maria, flood losses are expected to be a significant portion of the insured losses from these events. Both insurers and independent adjusters can serve claimants more effectively when they have access to more event-specific data,” Mr. Gregory said in a statement Thursday.
PCS is developing a database for NFIP catastrophe loss data, which will be maintained separately from the existing PCS database for insured losses from catastrophe events for at least 12 months, the company said. This will ensure that forms of reinsurance protection currently in force such as industry loss warranties are not unexpectedly affected, PCS said.