Moody’s Estimates US$3.0–5.0Bn in Insured Losses from Hurricane Melissa

• Moody’s RMS Event Response estimates private market insured losses from Hurricane Melissa to be between US$3.0Bn and US$5.0Bn, with a best estimate of US$3.5Bn. This estimate represents insured losses associated primarily with wind impacts in Jamaica, the island hardest hit by the Category 5 hurricane. Insured losses for other impacted Caribbean islands, including the Bahamas, Haiti, and the Turks and Caicos Islands, are expected to be minimal.
• Economic losses in Jamaica from the event could potentially exceed the island’s GDP, which was approximately US$20.0Bn in 2024. This loss estimate reflects property damage and business interruption to residential, commercial, industrial, and automobile lines of business, considers post-event loss amplification (PLA), including potential super-cat impacts due to widespread infrastructure damage to roads, power networks, etc., as well as non-modeled losses from extended business interruption and precipitation-induced flooding.
• The estimate does not include losses for any government or sovereign protection programs covering Jamaica (Caribbean Catastrophe Risk Insurance Facility, International Bank for Reconstruction and Development cat bond, and National Disaster policies) resulting from this event, which include both traditional (re)insurance and insurance-linked securities.
• Insurance penetration in Jamaica varies by line of business. Hotels stand out with near-total coverage and strong limits, reflecting their importance to the island’s tourism-driven economy. While take-up rates for other commercial lines are also high, as most businesses have some insurance coverage, there could be significant underinsurance due to inadequate limits.
• In contrast, personal lines take-up is quite uneven, with very low coverage for single-family dwellings, particularly outside affluent neighbourhoods in urban areas. Due to the protection gap, we expect many households and businesses to be vulnerable to severe financial and social disruption from Melissa’s impacts.

(Source: Moody’s Investors Service)