Private-sector losses from Katrina US$40-US$60 billion, RMS

Risk Management Solutions (RMS) recently stated it will expand its methodologies for estimating insured losses using real-time reconnaissance data, catastrophe models and databases of insurance industry exposure. RMS says it still anticipates that private-sector insured losses from Hurricane Katrina will reach US$40-US$60 billion with total economic losses exceeding US$125 billion.The loss estimate of US$40-US$60 billion is based on detailed modeling and analysis of wind damage, coastal surge and flooding in Louisiana, Mississippi, Alabama, Florida, as well as losses to the offshore oil and gas industry. RMS says the estimated range reflects the uncertainty that exists in many aspects of the localized damage as well as the insurance loss adjustment process, which has only just begun.In its report RMS says Katrina’s loss estimate for: first landfall ranges from US$1-US$2 billion; second landfall from US$20-US$25 billion; New Orleans flood from US$15-US$25 billion; offshore energy from US$2-US$5 billion; and additional sources of loss from US$2-US$3 billion.These estimates were reached by integrating RMS’s existing catastrophe models and exposure databases with remote sensing data and a customized model to assess flooding in New Orleans.