Risk Management Solutions (RMS) has issued a final Paradex index value of $2.82 billion for Hurricane Irene, of which 85% is attributed to residential losses. The value is based on Paradex U.S. Hurricane, an index used to approximate insured industry losses from wind and storm surge for U.S. hurricanes, and includes automobile, commercial, and residential modeled lines of business. Losses from rainfall-driven flood are excluded. Paradex estimates are used to support the objective and transparent placement of catastrophe risk in the insurance linked securities market.
The index incorporates observational data for Hurricane Irene from the WeatherFlow Hurricane Network, hardened weather stations specially designed to survive and record hurricane force winds. These stations captured the highest wind speed at 92.2 mph at the Fort Macon, North Carolina location. A total of 95 stations (around a quarter of which were WeatherFlow locations) recorded wind speeds of more than 50mph, and successfully gathered data along the path of Irene.
Last week, RMS released a U.S. insured industry loss estimate of between $2 and 4.5 billion for Hurricane Irene, excluding inland flood losses from heavy rainfall and all National Flood Insurance Program losses from surge and rain (with a further $0.5 – 1 billion for the Caribbean). RMS’ industry loss estimate takes into account additional drivers of loss not captured by the Paradex index, such as power outages and tree-fall damage, as well as an evaluation of observed damage from the event.
Source : RMS Press Release
