Homeowners bearing brunt of Hurricane Ian damage in contrast to commercial: MIS

Residential buildings have been hit hardest by the catastrophic flooding caused by Hurricane Ian, with commercial properties expected to be less severely impacted, McKenzie Intelligence Services’ (MIS) head of intelligence Louise Jones has said.

Speaking with The Insurer TV as part of its Close Quarter series, Jones said data collected by the geospatial imagery and (re)insurance intelligence consultancy indicated that flooding caused by Ian had inflicted considerably more damage on residential properties than commercial properties.

“What we’re seeing is that primarily residential buildings have really suffered,” Jones said.

“This is probably because they often have much lower defences, so we’re seeing significant flooding in and around residential, and we’re also seeing significant deposits that have been left, indicating that these buildings have suffered significant internal damage,” Jones added.

Commercial properties have suffered “considerably less damage”, Jones noted.

The MIS data suggests Hurricane Ian will have long-term consequences for the Florida homeowners market and for catastrophe appetites among (re)insurers.

The Florida homeowners market had already been showing signs of significant pressure ahead of Hurricane Ian’s landfall on 28 September, with a number of corporate failures and insurer exits this year.

Rating agency S&P has recently said that it expects homeowners to be the most affected line from the event, given that direct premiums written in Florida’s property lines are split roughly two to one between personal and commercial lines.

According to data compiled by MIS, 298,612 buildings – both residential and commercial – were severely damaged and 209,201 substantially damaged as a result of Hurricane Ian.

Large commercial property and infrastructure have come through “relatively unscathed”, particularly along the coast, although there have been some losses further inland for this type of property, Jones noted.

Heavy impact from flooding

MIS has been collecting data for Hurricane Ian since the beginning of the event and is now going through a refinement process, its chief product officer Rosina Smith pointed out.

Smith explained that MIS is providing its clients with figures based on a 1km by 1km assessment, but that it is continuing to refine data and collect further insights from new areas.

“So what this will mean is that estimates will start coming down, and I think we’ll see this across the industry as well, as we get a better handle on which individual properties are impacted, and to what extent,” Smith said.

In the meantime, while MIS continues to increase granularity around the data it is collecting, Jones described Ian as an event “above what we would normally see for a hurricane” in terms of flooding damage.

The fact Ian moved slowly across the impacted areas meant it dropped a significant amount of rain, contributing to unusual flooding activity, Jones noted.

The low-lying areas along the Florida coastline – particularly on the west coast – were also impacted owing to their vulnerability to storm surge, Jones added.

“So really, we’ve seen a lot more flooding impact than we would necessarily expect to see with a hurricane when normally the focus is wind damage,” Jones concluded.

In this video, Jones and Smith discuss the following topics:

-          What the data MIS has been compiling shows on the damages from Hurricane Ian

-          How new storm surge data compares with previous forecasts

-          How the data collected so far could change over time