Three modelers put Isaias insured losses at $1bn-$3bn, excluding offshore energy

Three catastrophe modelers put insured onshore losses from Hurricane Isaias between $1 billion and $3 billion, and all three estimates exclude offshore energy assets. Verisk's range of $1 billion to $2 billion is mostly wind damage to onshore property; Cotality puts wind and storm surge losses at $2 billion to $3 billion. KCC's $3 billion estimate is the highest of the three.

KCC's number is also the only one of the three that includes business interruption; it excludes boats, offshore property and NFIP losses, the flood claims paid by the federal program. Separate reinsurance-broker commentary put total insured losses at the lower end of the low-to-mid single-digit billions, a figure that adds inland flood, tornadoes and expected NFIP claims. The broker said the event was unlikely to affect January 1 reinsurance renewals.

Moody's said in an October 13 analysis, as reported by Insurance Business America, that the three refineries closest to the storm stayed operational heading into the weekend. They were Chevron's Pascagoula plant in Mississippi, Vertex's Saraland plant in Alabama and Hunt's Tuscaloosa plant in Alabama. Any disruption would have come only from power loss, which could be fixed within days at worst.

About 35% of manned offshore oil platforms had been evacuated before landfall, and an estimated 1.5 million barrels a day of oil production was shut in, according to Moody's. That is more than during Hurricanes Michael in 2018 or Sally in 2020. Operators have already begun moving crews back, and Moody's expects production to be fully restored within days or weeks. Evacuation and shut-in costs are mostly operational rather than insured physical damage, the analysis suggests, which is why dropping offshore assets from the modeled ranges may not widen the insured total much.

Chris Lafakis, the analysis's author, wrote that Isaias "was a temporary setback to U.S. oil production. But it spared the vulnerable refining industry and will leave no long-term scars on the U.S. energy sector." Insurance Business reported that global diesel prices have hit record highs because of refinery outages linked to conflict, and Moody's said the U.S. economy could not afford a new shock to refining.

The loss is an earnings event rather than a capital event. The Insurance Business article identifies business interruption as the area to watch, and BI is precisely where KCC's $3 billion sits above the other two estimates. If offshore production returns within days or weeks, as Moody's expects, the excluded energy exposures stay a supply story rather than a claims one.