Harvey may be among the world's most costly recent catastrophes

Risk modeler estimates up to $90 billion in losses
SEP 01, 2017
By  Bloomberg

As Tropical Depression Harvey winds down, its full economic impact is still unclear. Risk-modeling company RMS estimates $70 billion to $90 billion in losses from wind, storm surge and flood damage, most of it in the Houston metropolitan area. That would make the storm among the world's most costly catastrophes since at least 1970. And this is happening in what was considered a few short weeks ago as a fairly tame weather year. According to Swiss Re, total economic losses from disasters were $44 billion in the first half of 2017, down 62 percent from the first half in 2016. The biggest losses were from thunderstorms, and more than half of the $44 billion was insured. Although forecasters are reluctant to estimate how much of Harvey's damage insurers might pay, Chuck Watson, a disaster modeler with Enki Research, puts the figure at about 27 percent, far less than the 47 percent paid out for Hurricane Katrina.
Costliest insured losses
RankEventInsured loss ($B)VictimsDate (start)Country/region
1Hurricane Katrina; storm surge, damage to oil rigs80.71,836Aug. 25, 2005U.S., Gulf of Mexico
2Earthquake (Mw 9.0) triggers tsunami; aftershocks37.319,135March 11, 2011Japan
3Hurricane Sandy; storm surge30.1237Oct. 24, 2012U.S., Caribbean, Canada
4Hurricane Andrew; floods27.443Aug. 23, 1992U.S., Bahamas
5Terror attack on WTC, Pentagon and other buildings25.52,982Sept. 11, 2001U.S.
6Northridge Earthquake (Mw 6.7)24.861Jan. 17, 1994U.S.
7Hurricane Ike; floods, damaged to oil rigs22.6136Sept. 6, 2008U.S., Caribbean, Gulf of Mexico
8Earthquake (6.1) aftershocks17.1815Feb. 22, 2011New Zealand
9Hurricane Ivan; damage to oil rigs16.4181Sept. 2, 2004U.S., Caribbean, Venezuela
10Heavy monsoon rains, extreme flooding16.0124July 27, 2011Thailand
11Hurricane Wilma; torrential rains, flooding15.435Oct. 19, 2005U.S., Mexico, Caribbean
12Winter Storm Vivian14.564Feb. 25, 1990Switzerland, Germany
13Hurricane Rita; floods, damage to oil rigs13.234Sept. 20, 2005U.S., Gulf of Mexico
14Drought in the Corn Belt11.5123July 15, 2012U.S.
15Hurricane Charley10.024Aug. 11, 2004U.S., Caribbean, Gulf of Mexico
Sources: Swiss Re Institute, *The National Flood Insurance Program/FEMA and Cat Perils
Methodology: Costliest insured losses—Bloomberg ranked the costliest catastrophes from 1970 to 2017 based on insured losses, which are shown in 2016 dollars. Loss includes property and business interruption, excluding liability and life insurance losses. Victims include dead and missing. Mw refers to Moment Magnitude, which is based on seismic moment and is used to measure the size of large earthquakes. Costliest floods in the U.S.—Floods are ranked according to estimated economic losses, which are adjusted for GDP growth and shown in 2016 dollars. Ranking reflects the period of 1978 through 2016. Figures are for water damage only; wind damage is excluded.

Latest News

Investing for accountability: How to frame a values-driven conversation with clients
Investing for accountability: How to frame a values-driven conversation with clients

By listening for what truly matters and where clients want to make a difference, advisors can avoid politics and help build more personal strategies.

Advisor moves: Raymond James ends week with $1B Commonwealth recruitment streak
Advisor moves: Raymond James ends week with $1B Commonwealth recruitment streak

JPMorgan and RBC have also welcomed ex-UBS advisors in Texas, while Steward Partners and SpirePoint make new additions in the Sun Belt.

Cook Lawyer says fraud claims are Trump’s ‘weapon of choice’
Cook Lawyer says fraud claims are Trump’s ‘weapon of choice’

Counsel representing Lisa Cook argued the president's pattern of publicly blasting the Fed calls the foundation for her firing into question.

SEC orders Vanguard, Empower to pay more than $25M over failures linked to advisor compensation
SEC orders Vanguard, Empower to pay more than $25M over failures linked to advisor compensation

The two firms violated the Advisers Act and Reg BI by making misleading statements and failing to disclose conflicts to retail and retirement plan investors, according to the regulator.

RIA moves: Wells Fargo pair joins &Partners in Virginia
RIA moves: Wells Fargo pair joins &Partners in Virginia

Elsewhere, two breakaway teams from Morgan Stanley and Merrill unite to form a $2 billion RIA, while a Texas-based independent merges with a Bay Area advisory practice.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.