Hurricane Ida could cost US insurance companies $15 billion

Bloomberg news agency reported that Hurricane Ida, which hit the coast of Louisiana and the American Gulf Coast, could cost insurance companies about $15 billion at least, according to preliminary estimates.

Ellis Greenspan, a lead insurance analyst at Wells Fargo Bank, said initial estimates were that insurers would pay up to $20 billion in damages from the hurricane, according to a note sent to clients on Sunday, according to German news agency DPA.

“Bloomberg” believes that some of the past storms that struck the coast of the United States, including Hurricane Katrina, left severe damage that was not apparent until days after it reached land, so early estimates are subject to significant adjustments.

Talking about $20 billion in damages is a good starting point, Mark Doyle of RBC Capital Markets says, but warns that energy losses are still unknown, and there may be more internal damage, noting that the failure in assessing the damage may sometimes occur after the first hits of the hurricane.

“The winds keep blowing and the water levels keep rising,” Doyle added in a note to clients. He explained, “It may take some time before the full picture of the losses of insurance companies becomes clear, but at this stage, we do not expect a worst-case loss, although we expect significant losses that could affect insurance prices.”