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Moody’s RMS Event Response has provided a best estimate for the insurance and reinsurance industry losses from recent hurricane Melissa of $3.5 billion, with a range of between $3 billion and $5 billion anticipated.

The catastrophe risk modelling arm of Moody’s said that its estimate is based on both the privately insured hurricane wind and flood impacts in Jamaica, and includes post-event loss amplification and additional non-modeled sources of loss.

“This estimate represents insured losses associated primarily with wind impacts in Jamaica, the island hardest hit by the Category 5 hurricane. Insured losses for other impacted Caribbean islands, including the Bahamas, Haiti, and the Turks and Caicos Islands, are expected to be minimal,” Moody’s explained.

Moody’s estimate encompasses losses from property damage and business interruption to residential, commercial, industrial, and automobile lines of business, takes into account the potential for post-event loss amplification (PLA), including potential super-cat impacts related to infrastructure damage to roads, power networks, etc., as well as non-modeled losses from extended business interruption and precipitation-induced flooding.

Moody’s also noted that it does not take into account payouts under sovereign disaster insurance programs, including the CCRIF and the World Bank supported IBRD Jamaica catastrophe bond.

The estimate from Moody’s RMS analysis and models can be compared to other insured loss estimates already announced.

Cotality had said hurricane Melissa is estimated to have caused insured losses in a range from US $1 billion to US $2.5 billion in Jamaica.

Meanwhile, Verisk’s Extreme Event Solutions division had said that insured industry losses to onshore property in Jamaica from Hurricane Melissa will likely range between $2.2 billion and $4.2 billion.

Karen Clark & Company (KCC) pegged its estimate for the insurance industry loss from recent major hurricane Melissa at US $2.4 billion.

So Moody’s is on the higher side of the other early risk modeller estimates to come out, at this stage.

Jeff Waters, Director – North Atlantic Hurricane Models, Moody’s, said, “Hurricane Melissa was truly a generational event for Jamaica and will be the storm that defined the 2025 North Atlantic hurricane season. While the capital city of Kingston was largely spared from damaging winds, many other towns were devastated by a combination of catastrophic winds and widespread inland flooding. Being an island, repairs and recovery will inevitably go through significant supply chain challenges, even as several key ports on the island remain operational. For these reasons, we expect recovery efforts to take several months, if not years.”

Raj Vojjala, Managing Director, Modeling and Analytics, Moody’s, added, “In collaboration with local (re)insurers, several field reconnaissance surveys highlighted a dichotomy in Jamaica’s building stock between the insured and uninsured. Most insured buildings are well-built, traditionally designed for seismic risk with concrete or reinforced masonry structures, which are also resilient to high winds. In contrast, uninsured residential buildings largely exhibit less stringent build quality or enforcement of wind design provisions, due in part to a lack of major hurricane landfalls since Gilbert in 1988. As a result, as Melissa’s catastrophic winds tracked across the island, immense damage was caused to several communities.”

Also read for more news on Jamaica’s catastrophe bond:

– Hurricane Melissa crosses Jamaica cat bond parametric boxes at 892mb, 100% payout likely.

– Hurricane Melissa losses in Jamaica likely to fall to reinsurers, says AM Best. BMS suggests $5bn+.

– Melissa insured impacts in the billions. Jamaica cat bond full loss most likely: Twelve Securis.

– Jamaica’s cat bond “doing what it was designed to do” – Lefferdink, Aon Securities.

– Hurricane Melissa estimated single-digit billion insured loss. Cat bond payout likely: Aon.

– Jamaica cat bond marked near zero after Melissa landfall. Calculation process underway.

– World Bank says Jamaica catastrophe bond payout “likely” for hurricane Melissa

– No adverse ILS market reaction expected from Melissa cat bond payout: Fitch

Moody’s RMS estimates hurricane Melissa insured loss between $3bn and $5bn was published by: www.Artemis.bm
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