Mississippi Flooding Losses Worst Since Katrina

Monday, 09 May 2011 03:07 PM

 

  Comment  |
   Contact  |
  Print   |
    A   A  
  Copy Shortlink

The Mississippi River’s surge may cause the most flooding losses in the U.S. since Hurricane Katrina in 2005, with the federal government shouldering the majority of claims.

Flooding costs in states including Tennessee and Missouri may exceed losses from 2008 when Hurricane Ike struck Texas and the Cedar River crested in Iowa, according to Elizabeth Malone, insurance-industry analyst at Wunderlich Securities Inc. Katrina caused more than $16 billion in losses to the U.S. National Flood Insurance Program, which covers homes and some businesses. Ike led to about $2.6 billion in NFIP claims.

“You’d have to go back to Katrina to see something similar in terms of loss” from flooding, Malone said in a phone interview today. The industry losses from Katrina were “certainly more than this because the Mississippi flooding, for the most part, is not affecting that many urban areas.”

Claims from the flooding will add to losses suffered by insurers last month, which were the highest for an April in the U.S. since at least 2006, according to data compiled by Aon Corp., the largest insurance broker. Tornados in Alabama and wildfires in Texas contributed to more than $5 billion in U.S. industry losses last month, Aon said.

The Mississippi River is forecast to crest today at 48 feet in Memphis, Tennessee, just below a record set almost three quarters of a century ago, according to the National Weather Service. The bulge of water threatens more than 3,000 buildings in Shelby County, which includes Memphis, the local emergency management agency said yesterday.

Federal Programs

Flooding claims from residential customers and farmers are likely to be borne by the U.S. government, said Robert Hartwig, president and chief economist of the Insurance Information Institute, a trade group. The NFIP covers residential damage and the Federal Crop Insurance Corp. covers farmers’ losses.

“While we may be seeing the largest flooding event post- Katrina, it is simply not going to produce significant privately insured losses,” said Hartwig. “Historically these are losses that have found their way into the National Flood Insurance Program, particularly when we’re not going to see the major flooding of an urban area.”

The Standard & Poor’s 500 Property & Casualty Insurance Index advanced 0.7 percent at 1:34 p.m. in New York.

U.S. insurers typically incur the biggest catastrophe costs during the June-to-November Atlantic hurricane season, with wind damage from the storms costing private carriers more than flooding. Katrina, which struck New Orleans, caused total costs for insurers exceeding $70 billion.

The federal crop-insurance program expects to cover some losses in Missouri and doesn’t yet have an estimate of costs, said Shirley Pugh, a spokeswoman for the U.S. Department of Agriculture’s Risk Management Agency. A call to the NFIP wasn’t immediately returned.

--Editors: Dan Kraut, Dan Reichl

To contact the reporter on this story: Noah Buhayar in New York at nbuhayar@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

  Comment  |
   Contact  |
  Print   |
  Copy Shortlink
Around the Web
Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 
Follow Newsmax
Like us
on Facebook
Follow us
on Twitter
Add us
on Google Plus
Around the Web
Top Stories
You May Also Like

MLK III: It's 'Insanity' to Say 'Kill the Cops'

Wednesday, 17 Dec 2014 22:03 PM

Martin Luther King III, son of the civil rights icon, told Fox News on Wednesday that he doesn't think most of the peopl . . .

WH Homeland Security Advisor: Lone Wolf Threats Evolving

Wednesday, 17 Dec 2014 21:37 PM

Lone wolf attacks have changed significantly in recent years, reflecting the influence of Islamic State (ISIS) militants . . .

Van Susteren: Why Didn't Obama Help Marine Jailed in Mexico?

Wednesday, 17 Dec 2014 20:46 PM

Fox News host Greta Van Susteren says she is mystified that President Barack Obama did not give Andrew Tahmooressi, a Ma . . .

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

 
NEWSMAX.COM
America's News Page
©  Newsmax Media, Inc.
All Rights Reserved