Moody’s estimates Hawaiian wildfires caused up to $6 billion in economic losses
CNN
By Ramishah Maruf, CNN
New York (CNN) — Moody’s RMS estimated up to $6 billion in economic losses from the devastating wildfires in Hawaii, which killed at least 115 people and destroyed countless homes and businesses.
The losses could range from $4 billion to $6 billion, Moody’s said Tuesday. About 75% of the losses will be covered by insurance because of the island’s high insurance penetration rates, according to the risk modeling agency.
The loss estimate is wide-ranging, including “property damage, contents, and business interruption, across residential, commercial, industrial, automobile, and infrastructure assets,” Moody’s said.
“Post-event loss amplification is expected to be high in this event due to the island effect on supply chains, high construction labor costs in general, inflationary impacts during the expected long recovery time, and potential ordinance and law requirements,” said Rajkiran Vojjala, vice president of modeling at Moody’s RMS, in a news release.
Moody’s said it analyzed satellite and aerial imagery, as well as damage maps from the Maui Emergency Management Agency on August 11.
The estimate counts physical losses, but not the long-term macroeconomic effects. It doesn’t include the GDP loss as the island tries to recoup from the damage, government payments or other social costs.
Most of the losses are concentrated in Lahaina, Moody’s said, where insured property value ranged from $2.5 billion to $4 billion.
Hawaii will be expensive to rebuild. Construction costs about 44% more compared to the mainland, according to an estimate from Verisk, a global insurance data analytics provider.
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– CNN’s Chris Isidore contributed to this report.
