Moody’s says economic loss from Hawaii wildfire could be as high as $6 billion

(This Aug. 22 story has been corrected to say that the estimate was from Moody’s catastrophe risk modeling business, not the ratings agency, which is a separate unit of Moody’s Corp, in paragraph 1)

(Reuters) – The catastrophe risk modeling business of Moody’s said on Tuesday it estimates the economic loss from the Hawaiian wildfires to be in the range of $4 billion to $6 billion.

The company’s Risk Management Solutions division, however, said in a report that most of the economic damage is expected to be covered by insurance, in the range of about 75% or more.

Wildfires early this month on Hawaii’s Maui, which have killed hundreds of people, forced tens of thousands of residents and tourists to evacuate the island and devastated the historic resort city of Lahaina.

Moody’s report said that most of event losses are expected to be from Lahaina.

“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 for modeling at Moody’s RMS.

(Reporting by Amna Karimi in Bengaluru; Editing by Krishna Chandra Eluri and Maju Samuel)