Vast swaths of several U.S. states remain underwater after severe flooding deluged the Midwest and Plains.
Rapid snow melt combined with heavy rainfall recently caused a number of rivers to overflow and flood communities across the Central U.S. Nebraska was hit particularly hard, though Iowa, Wisconsin, Illinois, South Dakota and Minnesota were also impacted. The storm system that dumped heavy rains as it moved through the Rockies and Plains last week also caused blizzard conditions from Colorado into western Nebraska and South Dakota.
"This was a major storm with significant impacts and will have ongoing costs going forward due to the damage to infrastructure and losses to the agricultural community," said Andy Foster, a meteorologist for the National Weather Service.
Preliminary estimates put losses for Nebraska's livestock sector at more than $400 million. A spokesperson from the Nebraska Farm Bureau said the state's crop industry would take an estimated $440 million hit due to delayed or prevented planting. Those losses do not account for damage to property, which the spokesperson said would be "extensive."
As much of the impacted land is still flooded, it will be difficult for officials to get a better estimate until the waters recede. The Nebraska Emergency Management Agency website has running totals of estimated statewide damage which place losses to public infrastructure such as bridges and roads at just over $553 million, and losses to private structures at about $89 million.
"We’re looking at a long-term flood event," Foster said. "It will continue because you're dealing with all these higher river levels and expected snow melt yet to occur."
The meteorologist said the event was "not unprecedented," but did say the magnitude and impacts of the floods were "unusual." Foster compared the impact of the flooding to that of 2011, 2008 and 1993 for certain locations.
Howard Mills, a global insurance regulatory leader at Deloitte, said the insurance industry is well-capitalized and can "easily handle any losses that have occurred."
"Hopefully, if there is any good that will come out of this terrible event, it is that this might be a further incentive to Congress to undertake some significant reforms to the National Flood Insurance Program," Mills said.
Although reforms to the NFIP have been slow-moving, the past month has seen two changes aimed at improving the system. A finalized rule now requires mortgage lenders to accept private flood policies that are comparable to those of the NFIP. Also, the Federal Emergency Management Agency recently announced it would alter the way it calculates flood risk. The new system will be implemented in 2020.
Claims for residential or commercial property damage caused by the floods would be paid out by the NFIP, if residents are fortunate enough to have purchased a policy. There are 12,180 NFIP policies in Iowa, and just 8,552 policies in Nebraska, according to a FEMA spokesperson.
On the agricultural side, multiperil crop insurance policies, which are popular among farmers, typically contain coverage for "excessive moisture." Andrew Huff, federal affairs director for the National Association of Mutual Insurance Companies, said he believes the flooding of crops would be covered by the excessive moisture provisions, so farmers should be able to file claims under their multiperil policies.
On an aggregate basis, Chubb Ltd. in 2018 wrote the most crop insurance business in South Dakota, Nebraska, Illinois and Iowa, according to S&P Global Market Intelligence data. Based on aggregate direct premiums written, the top writers of federal flood business in those states were Assurant Inc., Selective Insurance Group Inc. and The Hartford Financial Services Group Inc.
Click here for a template featuring a market share for P&C groups and individual companies with separate tabs for all 50 U.S. states.
Click here for market demographics template that provides various demographic data, at all states, MSAs, or counties.