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Estimated insured losses resulting from Monday's devastating storms in Oklahoma are at least $1 billion, said Insurance Information Institute President Robert Hartwig.
Separately, Eqecat Inc. estimated insured losses at $2 billion to $5 billion in storms over three days in 10 states.
Mr. Hartwig took a 90-minute tour Thursday with Oklahoma Insurance Commissioner John Doak through devastated areas of Moore, Okla., which was ravaged by a massive EF5 tornado with estimated winds reaching more than 200 mph.
Property worth more than $6 billion was within the track of the massive tornado, Air Worldwide Corp. said Wednesday.
“I don't think it will be a $6 billion loss,” Mr. Hartwig said Thursday. “I think we're looking at something in the $1billion-plus range. It could be $2 billion; we don't know. I think a wild card here is how much the commercial losses are and, then, ultimately what business interruption losses are.”
Estimated insured losses from the tornadoes over the May 18-20 period are $2 billion to $5 billion, catastrophe modeling firm Eqecat said Thursday in a statement.
The tornado in Moore, Okla., caused 24 fatalities and damaged about 13,000 structures, where the bulk of the losses are expected, Eqecat said. “Advanced tornado forecasts and warnings were not sufficient to reduce the loss of life from these events,” the Oakland, Calif.-based modeling firm said.
Many homes in Moore were reduced to rubble with winds scattering debris over a very wide area, Mr. Hartwig said.
Some debris reportedly was scattered as far as 100 miles away.
“There is complete and total destruction in large parts of this town,” Mr. Hartwig said, noting that thousands of vehicles were damaged or destroyed.
“I've been at scenes like this before and I'm a little bit surprised by the number of damaged and destroyed vehicles I have seen here,” he said. “That goes to attest to the fact that the storm hit when many people were at work and there were parking lots full of vehicles, which were simply just blown apart.”
While much of the damage appears to affect residential areas, there are damaged hospitals, schools, small retail areas, a movie theater and other businesses, Mr. Hartwig said.
“It's not to the same extent of the commercial damage as in Joplin, Mo., but there is commercial damage. The largest would be the hospital here,” Mr. Hartwig said of Moore Medical Center.
While there will be business interruption claims in Moore, it is difficult to assess how much that will be at this point, Mr. Hartwig said.
As of Thursday, there were 1,200 insurance adjusters on the scene, representing insurance companies such as Liberty Mutual Group Inc. and USAA Insurance Group, among others, Mr. Hartwig said.
“The Oklahoma Insurance Department is doing a fantastic job of rapidly licensing out-of-state adjusters within minutes,” Mr. Hartwig said. “It's rare to see that kind of efficiency and that is going to go a long way towards expediting this process.”
Insurer response is “overwhelming and compassionate,” Mr. Hartwig said. “I will give great credit to the insurance commissioner for having an extremely efficient process to locate all the companies in one place for the sake of policyholders and one place for adjusters to come to get their license to work in the state. The whole process is working very efficiently.”
Insured loss estimates of $2 billion to $5 billion encompass multiple tornado touchdowns in Arkansas, Colorado, Illinois, Indiana, Iowa, Kansas, Missouri, Nebraska, Oklahoma and Texas and are focused on property and auto insurance, Tom Larsen, senior vice president and product architect at Eqecat, said in a statement.
“All of the losses would be summed up as a single occurrence,” he said. “This is especially important for regional insurers who could potentially have a large portion of their policies impacted by a system like this.”
Overall in the insurance industry, Eqecat estimates that a $5 billion occurrence represents a loss that has a 5% probability per annum of being exceeded, which is “modestly rare,” Mr. Larsen said. “This threshold has been exceeded in two of the last three years — 2011, 2013 — making this even more exceptional.”