Hurricane Harvey Response

//Hurricane Harvey Response

Hurricane Harvey Response

On The Frontlines of Hurricane Harvey Response

The total residential insured and uninsured flood loss for Hurricane Harvey could be between $25 billion and $37 billion, according to CoreLogic, a global property information, analytics and data-enabled solutions provider – and its estimates are likely to be as accurate as any, after all, it’s right there helping the brokers on the frontline.

The company’s scientists, data analysts and modelling engineers have been working around the clock to try to project and validate exactly what’s happening, said Tom Larson, senior director, content strategy, CoreLogic.

“It has been a full-on challenge every day since last Wednesday,” Larson told Insurance Business. “Everyone is working like crazy in order to pull together the data we have and set up a reasonable model of what’s happening in order to help our clients begin recovery.
“Our task is to show people how to respond to a catastrophe like this. We need to show them the scale of the situation and how big their response needs to be. Underlining this is about 500,000 damaged homes. It’s a people event that we’re working diligently to try to assist with.”

CoreLogic’s preliminary loss estimates suggest that approximately 70% of projected flood damage in the 70-county area in Texas and Louisiana is uninsured, with residential uninsured flood loss estimated to be between $18 billion and $27 billion. According to data analysis, only $6.5 billion to $9.5 billion flood loss in the same area is covered by insurance, which includes inland, flash and storm surge flooding. An additional estimated $1 billion to $2 billion in insured loss is attributed to wind damage.

Insurance companies, agents and brokers have been approaching CoreLogic with all sorts of questions tailored to various markets, according to Larson. Insurers are trying to anticipate how many claims they might have to deal with, and the reinsurers and financial markets are trying to project what economic losses they might face. “We are working really hard to make sure our clients are getting the numbers they need,” said Larson. “In the next week or so, we will do more clarifying and more break-down in order to help people better understand the situation.

“The flooding aspect of Harvey has made it much more challenging than other catastrophes. If you look back at Hurricane Sandy, it was a huge storm but doesn’t seem to have impacted as many homes. Hurricane Katrina was extremely difficult, but Harvey is different in that it’s covering a huge area of land and has caused severe flooding.” Catastrophe modelling, like the work of CoreLogic, is relatively new in the insurance industry – but it’s benefits have been felt keenly throughout Texas and Louisiana in the past week. The availability of big data and modelling technology can help across all insurance aspects from underwriting to claims.

“Flood risk models are moderately new in the US as far as the insurance industry goes,” Larson added. “I expect Hurricane Harvey and the flooding it has caused will be a turning point for flood risk modelling, and people will grow more confident about data projections.”