Of course, with modern modeling tools for natural catastrophes and advanced big data analysis, potential loss scenarios for Harvey could easily be developed. But these would change almost hourly and the range of forecast scenarios would be broad. It is currently impossible to assess the damage. Many neighborhoods of the greater Houston have been still underwater over the last weekend. The water levels are expected to recede in the course of this week. However, in some areas it may take one or even two weeks until the water will have completely disappeared. Travel to the damaged areas is difficult to impossible due to road closures, lack of gas in the area and the devastation that has occurred.
"It is pure speculation to make any statements about possible claims impact or overall losses at this stage," says Joerg Ahrens, Global Head of Key Case Management, and is responsible for managing large claims at AGCS. A few dozen customers have reported damage as a precautionary measure, mostly port facilities or oil processing companies. But the true extent of the destruction is still unknown, even among early claimants.
"Most affected companies currently only know that their land or buildings are submerged, but not even their own employees have access to the company for security reasons," says Steve Kennedy, Regional Head of Property, Energy and Engineering Claims for North America. The AGCS office in Houston is closed and is not expected to reopen until Tuesday.
In the coming days and weeks, affected companies, together with Allianz loss adjusters, will get a first impression of the actual damage. During inspections they can investigate whether and to what extent harbor infrastructure, industrial facilities, office buildings or shopping centers have been damaged by the storm's excessive water. Whether machines can be repaired or declared as totally damaged is a comparatively simple decision. It is much more difficult – and naturally also more challenging -- for companies to determine the losses that will be caused by business or supply chain interruption over the next few weeks or even months. Such interruption can quickly reach millions of dollars and exceed the actual material damage by multiple factors.
"We actively support and advise our customers before, during and after the storm to limit the damage and to help them return to normal operation as quickly as possible," emphasizes Ahrens. "We will also make every effort to provide quick coverage commitments and issue first advance payments wherever possible.”
While the tragic scale of the impact on the residents and neighborhoods in Harvey’s path is obvious, the overall commercial effects of the hurricane cannot yet be judged. Comparisons with previous natural catastrophes such as Superstorm Sandy, whose storm surges hit the northeast coast of the United States in October 2012 and which caused AGCS 900 claims and cost the insurance industry USD 29.5 billion, or 2001’s comparatively moderate tropical storm Allison which was also accompanied by massive rainfall have little validity at this stage.
"Time will tell," said Ali Shahkarami, who is responsible for catastrophe risk research at AGCS. Each hurricane has its own course and its peculiar features such as gale winds, storm floods or heavy rain falls. "Even if hurricanes are somewhat announced natural disasters, each of them is good for surprises." Besides Harvey there are other tropical storms which he has started monitoring. Over the next few days, “Irma”, which has strengthened to a category 5 storm, is expected to make landfall that the US coast. “This hurricane season may turn out to be an active one after all, matching predictions.”