Hurricane Sandy wreaked havoc in the Northeast U.S. this week with massive flooding, severe winds, and widespread power outages affecting millions of people. Much of New York City and New Jersey are still shut down, and there have been at least 88 deaths reported in the U.S. While the Lockton New York office has power, it is very difficult for many Associates to reach the office because of transit closures. Most Associates are working from home or other remote locations.
Claim reports are beginning to trickle in to Lockton, but many clients who vacated the affected areas have not yet been able to safely assess the damage. We expect the calls to pick up during the next few days as clients are allowed to regain access to their properties and survey the damage. Lockton’s CAT team has been activated and we have Claims Associates on the ground assisting clients. We are also working closely with our carriers to determine the best course to assist clients that may be affected. While very difficult to provide accurate claims estimates at this time, CAT modeler EQECAT has provided an initial estimate of $10-20 billion in insured losses and $30-50 billion in economic damages overall.
With near-record policyholders’ surplus and a large drop in losses since 2011, the U.S. P&C insurance industry’s balance sheet is strong. Robert Hartwig, President of the Insurance Information Institute told National Underwriter that he believe insurers are prepared to deal with Sandy financially and logistically.
While it is much too early to determine what Sandy will mean for future rates, we expect that clients with property exposures in the Mid-Atlantic will be looked at with closer scrutiny in the near future. Information and engineering will be key components in future pricing of these properties. It remains key to have up to date engineering reports and accurate property information in hand for underwriters. Having the right information at your fingertips will help tell your story more effectively to underwriters.
Lockton’s first concern is the safety of our clients, business partners, and their families. For additional information, please contact your Lockton Risk Control Services Consultant or the Lockton Catastrophe Response Team.