Insurers Prepare for Hurricane Rita as Katrina Claims Linger

Strategic Insights -

Hurricane Rita is forecast to collide with the Texas coastline, threatening to exacerbate an already strained claims-adjusting system in the wake of Hurricane Katrina. Insurers are bracing for the impact, with thousands of adjusters deployed across the Gulf Coast region, while catastrophe modelers warn of up to $740 billion in insured property at risk in coastal Texas areas. The National Oceanic and Atmospheric Administration has warned of potential hurricane-force winds extending 85 miles from the storm center, making evacuation and claims response crucial.

Key Takeaways:

  • Insurers, still reeling from Hurricane Katrina, are preparing for Hurricane Rita's impact, with thousands of adjusters deployed in the Gulf Coast region.
  • Catastrophe modeler AIR Worldwide estimated up to $740 billion in insured property at risk in coastal Texas areas threatened by Rita.
  • Insurers such as Nationwide and Progressive are putting their regional and national adjusters on standby, ready to deploy additional support if needed.
  • The Insurance Council of Texas has begun contacting independent adjusters to prepare for the potential storm's impact.
  • The Texas Disaster Coalition has already begun evacuations of coastal areas, including evacuating New Orleans Katrina evacuees from Houston to other states.
  • Insurance providers, including Hartford Financial Services Group, are urging people in threatened areas to evacuate, emphasizing that lives can't be replaced.

Statistics:

  • 4,700 independent and emergency adjusters in Alabama alone are on the ground, with thousands more across the Gulf Coast region.
  • 30% of Katrina claims have been settled, with many insurers like Nationwide and Progressive preparing to deploy additional adjusters and support.
  • An estimated $740 billion in insured property is at risk in coastal Texas areas threatened by Rita, according to AIR Worldwide.
  • Over 1 million people had evacuated coastal areas under voluntary or mandatory evacuation as of September 22.
  • Total losses including flood losses from Hurricane Katrina may reach $125 billion, with insured losses estimated at up to $60 billion.

Sources:

  • (BestWire, Sept. 21, 2005)
  • BestWire, Sept. 16, 2005
  • NOAA, Hurricane Rita (Sept. 22)
  • AIR Worldwide, Hurricane Rita (Sept. 22)
  • BestWire, Sept. 9, 2005
  • A.M. Best Co. state/line product information based on direct premiums written (2004)