FM Global compared the losses clients experienced during Hurricanes Harvey, Irma and Maria to models used throughout the insurance industry to predict the gross losses from natural catastrophes. FM Global's clients results were consistently better than model predictions in all three of these events. The difference, FM Global believes, is that many of its clients were able to avoid and minimize losses by acting on the company's sound engineering advice. As a result, millions of dollars of losses were averted.
The company's experience shows that both emergency response and physical wind and flood improvements proved effective in reducing the amount of loss. In fact, FM Global clients normally suffer less than half of what models indicate loss value should be.
Insurance industry catastrophe modeling results show the wide dispersion in estimated losses from Hurricanes Harvey, Irma and Maria, which caused damage to significant portions of the Caribbean and Southeast United States. On the low-end, estimates are US$75 billion and on the high-end, estimates are US$145 billion.
FM Global and AFM's 2017 operating results were significantly impacted by these hurricanes. In a 26-day period, 2,500 locations had losses, compared to the typical 10,000 losses in a year. But the ultimate net losses were within a tolerable range considering the geographic areas impacted, rainfall totals in the case of Harvey, and observed wind speeds from Irma and Maria.