Report: Models fail to give accurate account of Sandy losses

01/10/2013 | PropertyCasualty360

Property/casualty insurers evaluating the damage from Hurricane Sandy relied on catastrophe models that focused on windstorm risk, sometimes resulting in hefty losses because the storm surge "caused the most damage," according to Fitch. The models also failed to reflect the exposure to auto losses as thousands of vehicles were found to be total losses because of salt-water damage, the ratings firm said. "Hurricane models typically produce low automobile losses under the assumption that the majority of vehicles are driven away prior to the storm as part of the evacuation," Fitch said.

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