The Wall Street Journal reported today that catastrophe modeling firm Risk Management Solutions is telling clients that insured losses from Hurricane Sandy could reach $25 billion or more, the highest potential estimate reported since the storm struck two weeks ago.
The estimate does not surprise Dave Finnis, our National Property Practice leader, who says a number of factors are combining to drive up losses. According to Finnis, “Cleanup and restoration efforts are underway, but lost sales and high expenses will soon translate into business interruption losses. BI losses take time to materialize and will continue to mount.”
The density of assets in the New York and New Jersey area hit directly by the storm will be another factor likely to escalate the insured loss total, he said. He also expects that the demand surge on contractors and other service providers and the high cost of these services, especially as the winter months draw near, will likely drive up costs.
As claims escalate, the industry is getting a better view of Sandy’s toll. I spoke with Dave Passman, our National Director of Property Claims in North America, about the storm losses and how the industry is responding.