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Howard Mills of Deloitte's Insurance Industry Group on insurance losses for Isaac
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Thank you can I -- let the financial -- from -- still lighting up of calls but early estimates say the hurricane damage could cost the insurance industry.
Up to a billion and a half dollars and joining me now is -- -- mills chief advisor and director of delights insurance industry group.
Some -- -- by the late New York State insurance superintendent you know earliest stuff is what was saying David.
-- -- -- -- but the problem here with Isaac was it came on the same anniversary is Katrina we know that this kind of unusual.
But in reality is you would just saying the impact -- that obviously son who a lot less than with Katrina no doubt but a billion and a half dollars to me sounds like a lot of money can you put in perspective.
Yes actually it does sound like a big number but to put it in context that's less than 1% of the total US capacity this is nowhere near the insurance event.
All of -- Katrina which was you know 45 billion dollars this isn't a billion maybe a little bit more.
It very significant to the folks were impacted obviously.
But the industry is very well capitalized this is not going to be a significant event from the industry perspective they can certainly handle it.
The problem with -- storm has been its source so slow moving -- in the rain is just lingered so most of the damages.
A will be flooding related and where personal properties involved of course -- big problems and big worries is people will not happen many instances flood insurance and -- -- covered under the policy.
Federal government flood insurance correct that's right it's a federally subsidized program the people have to purchase separately from their homeowner's policy in.
Every time there's a disaster like this you have all these sad stories that people.
Did not understand that they weren't covered for flights that's an important message to -- is an expensive flood insurance especially in this part of the country which is traditionally flood prone here's what a great bits of news about this know what's not actually -- very inexpensive it's federally subsidized people should -- and FIP dot com.
To look -- flood insurance it's very inexpensive if you don't have it.
And you live anywhere near where you can have flooding should get what about the property damage from hurricane -- from the wind and storm related -- cents.
Since Katrina -- this is an area that parking seem to take a -- Is it hard to get insurance and one of the premiums like -- Know that there's plenty -- capacity all the big US carriers are there the prices have actually not been gone up one of the -- issues the insurance industry's been having is it's a very soft market.
In terms of pricing -- because there is so much capacity.
Yeah they aren't be a little charge that much prices and again to put into context the losses here yeah even this billion dollar plus loss won't be enough to drive up -- so prices are actually low what's -- it's a consumers market.
From a business point of view do you get insurance for business interruption costs can you -- that and is that something has taken out very commonly yes and I think that that will probably be a large portion of the losses in this storm this is obviously heading into the holiday weekend.
Tragically a lot of businesses people hearing this -- -- be going down the gulf obviously for -- last bit of summer so there will be probably a significant amount.
Of business interruption claims that is an -- -- -- yeah and most businesses will happen.
Getting back to -- we always hear the horror stories -- dealing with the government to go to all the bureaucracy and red tape it's not -- if you do have that insurance is Hans.
To eventually get some money back is that -- No takes a long time but not if you if you've got the coverage that the NF IP the flood insurance coverage comes in -- -- companies are very very good it.
Getting these claims processors the adjusters into the field to the private sector side.
Will be very very swift the industry does an excellent job yet in these situations.
And if you've got the federal -- flood insurance yeah program you'll get coverage you'll get your payments as well the problem is convincing people that.
They they takeout habit to take it out it's a very important you know especially that part of the country they really -- are right how would -- thank you so much for being.
