Today Willis Re released a report (here in PDF) on the state of the reinsurance industry, and presents an estimated $20-25 billion in insured losses for Sandy. As is conventionally done, to arrive at total losses for 2012 I have doubled the $25B figure to arrive at an estimated $50 billion total loss for Sandy. Please note that the final loss estimate, apples-to-apples with the normalized loss database (kept by NOAA/NHC) may wind up being higher or lower. In addition, I have added in 3 placeholders of $5 billion in losses for the 3 other storms (besides Sandy) which made landfall as post-tropical cyclones of hurricane strength in 1904, 1924 and 1925 -- the losses from these four storms are depicted in grey in the graph above). In 2013 we will develop a rigorous basis for estimating these losses, which I'd guess have a good chance of winding up larger than the placeholders I have entered for now.
In case you are curious there is no trend in the normalized data, which makes sense as there is also no trend in hurricane frequency or intensity at landfall in the United States over the same period, and the lack of trend is insensitive to the removal of the 4 post-tropical cyclones.
What does the reinsurance market say about all this? Willis Re explains:
"most reinsurers are still within their annual catastrophe budgets for 2012 and not facing any capital impact... In the absence of Superstorm Sandy, reinsurers would have found it difficult to resist buyer pressure for further concessions. As such, Sandy’s impact has helped to stabilize market pricing on an overall basis and reinsurers have largely delivered to their clients in terms of capacity and continuity."In other words, thank goodness for Sandy.
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