LOSSES
Gallagher Re Estimates at Least $1 Billion in Losses if Francine Hits Louisiana as Hurricane
ROLLING MEADOWS, Ill. //BestWire// - Tropical Storm Francine, which is expected to strengthen to a hurricane before making landfall in Louisiana, could inflict $1 billion or more in private insured losses, according to a Gallagher Re hurricane advisory.
It could reach the low single-digit billions were the track to shift east, closer to the New Orleans metro region, said Gallagher Re.
The National Hurricane Center issued a hurricane warning for the Louisiana coast from Sabine Pass on the Texas boundary east to Grand Isle, which is south of New Orleans. The storm should make landfall on Sept. 11.
Gallagher Re noted Francine is still organizing, gauging its loss estimate based on Francine’s current track, predicted rainfall and storm surge and strong Category 1 winds.
“As the case with any large hurricane, the exact track of the system can make a major difference in eventual physical impacts and resultant loss costs,” it said.
The $1 billion private insured loss estimate would align with recent historical landfalling storms in Louisiana. That level would be “highly manageable for the re/insurance industry,” Gallagher Re added.
Francine is predicted to make landfall with 90 mph winds. If it strengthens further, Gallagher Re said recent Category 2 storms in Louisiana caused insured losses in the low-to-mid single-digit billions of dollars.
“The biggest driver of loss potential and unknowns around current financial estimates involves the current cone of uncertainty. The center line of the latest National Hurricane Center track guidance would bring the storm ashore in a low densely populated part of the state,” it said.
A slight eastward shift in track seen on Sept. 10 suggests hurricane-force winds in Baton Rouge and strong tropical storm-force winds in New Orleans and Lake Charles, said Gallagher Re.
Francine would be the third hurricane this year to make landfall in the United States and the first in Louisiana.
Early in the season, Beryl came ashore in Texas, followed by Debby last month in Florida. In an early-September Atlantic hurricane season update, Colorado State University researchers said the Atlantic hurricane season got off to an “extremely fast start... leading to a well above-average season through the middle part of August” (BestWire, Sept. 9, 2024).
The five largest writers of homeowners multiperil insurance in Louisiana in 2023, based on direct premiums written, were: State Farm Group, with a 21.94% market share; Allstate Insurance Group, 13.88%; USAA Group, 7.6%; Liberty Mutual Insurance Cos., 7.11%, and Forza Insurance Group, 5.39%, according to BestLink.
(By Renée Kiriluk-Hill, senior associate editor, BestWire: Renee.Kiriluk-Hill@ambest.com)