Moody’s RMS Event Response Estimates U.S. Private Market Insured Losses for Hurricane Debby Will Not Exceed US$1.5 Billion

NEWARK, CA – August 14, 2024 – Moody’s RMS Event Response estimates U.S. private market insured losses from Hurricane Debby will not exceed US$1.5 billion. This estimate represents insured losses associated with wind, storm surge, and precipitation-induced flooding.

Moody’s RMS Event Response also estimates losses to the National Flood Insurance Program (NFIP) from this event to be less than US$300 million.

The wind and storm surge components for this industry-insured loss estimate are based on an analysis of ensemble footprints in Moody’s RMS Version 23 North Atlantic Hurricane Models.

The ensemble footprints are reconstructions of Debby’s hazard that capture the uncertainties surrounding observed winds and storm surge. Similarly, the inland flood component of the loss estimate was derived using Version 1.2 of Moody’s RMS U.S. Inland Flood HD Model.

Exposure informing the private market loss estimates was based on Moody’s RMS U.S. Hurricane and U.S. Private Flood industry exposure databases. Exposure for the NFIP loss estimate was based on Moody’s view of NFIP policy-in-force data published by FEMA.

Moody’s RMS Event Response developed and validated the wind, storm surge, and inland flood reconstructions and corresponding loss estimate using public and privately available data, including wind station observations, river gauge water level data, web-based reconnaissance, aerial imagery analysis, and Moody’s RMS HWind real-time data products.

Jeff Waters, Director – North Atlantic Hurricane Models at Moody’s, said: “Hurricane Debby should not be a major event for the (re)insurance market. Debby made landfall just 10 to 15 miles (16 to 24 kilometers) from last year’s Hurricane Idalia’s Florida landfall as a Category 3 hurricane. So, there is certainly some overlap of the exposures affected by both events.

Recovery is still ongoing in some of those affected areas, but in many cases, we expect the repaired roofs to fare better with Debby, as they now reflect more recent, stringent building codes.

Events like Debby continue highlighting the potential damage from water, notably storm surge and precipitation-induced flooding, and the need to model those sources of loss effectively when quantifying hurricane risk.

The slow-moving nature of the storm caused excessive rainfall—in some cases beyond the 50-year return period—with subsequent widespread pluvial and fluvial flooding along the U.S. East Coast, especially Florida and the Southeast.

Insured flood losses will be absorbed by the NFIP, especially along coastal portions of Florida, Georgia, and the Carolinas, where take-up rates are higher, as well as the private market. However, we expect a sizable amount of uninsured flood losses from this event, particularly in non-coastal areas where NFIP take-up is much lower.”

Estimated losses reflect property damage and business interruption to residential, commercial, industrial, and automobile lines of business, and consider sources of post-event loss amplification (PLA) and non-modeled sources of loss.

Hurricane Debby Synopsis

Hurricane Debby was the fourth named storm of the 2024 North Atlantic hurricane season, the second hurricane, and the second named storm to make landfall in the U.S. this season.

Debby made landfall as a Category 1 hurricane near Steinhatchee, Florida on Monday, August 5. At landfall, Debby had maximum sustained winds of 80 miles per hour (130 kilometers per hour) and a central pressure of 979 hPa, bringing hurricane-force winds, damaging storm surge, and heavy rainfall to portions of Florida’s Big Bend region and Gulf Coast.

Coastal and interior areas of Georgia and the Carolinas experienced heavy rainfall with widespread inland flooding as Debby meandered off the coast for several days. After making a second landfall in the U.S. in Bulls Bay, South Carolina as a tropical storm on Thursday, August 8, Debby moved northward and eventually became post-tropical.

During this time, several Mid-Atlantic and Northeast states were impacted by precipitation-induced flooding and severe weather, including tornadoes, in some areas.

ENDS

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The technology and data used in providing this information are based on the scientific data, mathematical and empirical models, and encoded experience of scientists and specialists. As with any model of physical systems, particularly those with low frequencies of occurrence and potentially high severity outcomes, the actual losses from catastrophic events may differ from the results of simulation analyses.

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