Hurricane Sandy could cost property insurers up to£9.3bn according to initial estimates by catastrophe modelling firm AIR Worldwide.
Another catastrophe modelling firm Eqecat have lowered their initial estimates to £3.1bn. However, the firm said that the wider economic losses could reach £6.21bn.
In addition to the property damage costs, business interruption claims will occur – not just as a result of property damage at the supplier sites, but as a result of power failure leading to the stoppage or partial stoppage of production.
With Hurricane Katrina, interruption claims added a further 20% to the overall insurance loss. Sandy’s interruption losses will largely depend on the speed of recovery of the subway and transportation links.