North America/Bermuda

Increase in average insured storm loss costs

The California based catastrophe risk modelling consultancy, Risk Management Solutions (RMS), is predicting that insurance losses from storms in the Gulf of Mexico will be 40% higher than average and storm losses in the Mid Atlantic and the North East coast of the US will be 25% to 40% higher than average. According to RMS, insured storm losses averaged around $3.5bn annually over the last 20 years, but increased to $23.0bn in 2004 and $56.0bn in 2005. Damage caused by Hurricane Katrina accounted for more than $36.0mn of the 2005 figure. The RMS predictions are based on the increase in sea surface temperatures in the Atlantic basin.