Moody’s RMS Event Response has projected that private market insured losses from Hurricane Melissa, driven mainly by wind damage in Jamaica, could range between $3-5 billion. This includes minimal contributions from other affected Caribbean islands, such as the Bahamas, Haiti, and the Turks and Caicos Islands. The best estimate of insured losses stands at $3.5 billion, but the overall economic losses in Jamaica could potentially exceed its GDP, which was approximately $20 billion in 2024.
The estimate takes into account property damage and business interruption across various sectors, including residential, commercial, industrial, and automotive lines. It also includes post-event loss amplification (PLA), such as widespread infrastructure damage to roads, power networks, and non-modelled losses from extended business interruptions and flooding caused by precipitation.
However, the estimate does not factor in losses covered by government or sovereign protection programmes in Jamaica, including those under the Caribbean Catastrophe Risk Insurance Facility (CCRIF), International Bank for Reconstruction and Development (IBRD) cat bonds, and national disaster policies. These protections include both traditional reinsurance and insurance-linked securities (ILS).
Wind, Flooding, and Storm Surge Driving Losses
According to Moody’s, the majority of insured losses from Hurricane Melissa will result from wind damage, with additional losses coming from precipitation-induced flooding and storm surge. While commercial lines, including hotels, resorts, multi-family commercial buildings, and high-rise structures, will account for the bulk of wind-related claims, business interruption coverage will also make up a significant portion of the losses.
Insurance penetration in Jamaica varies across different sectors. Hotels typically have near-total coverage with strong limits, and most commercial businesses also maintain substantial insurance coverage. However, some businesses may be significantly underinsured due to inadequate policy limits. In contrast, personal lines insurance penetration is uneven, with low coverage for single-family homes, especially in non-affluent urban areas. This protection gap leaves many households and businesses vulnerable to severe financial disruption following the storm.
Impact of Hurricane Melissa
Hurricane Melissa made landfall three times: first near New Hope in St. Elizabeth Parish in southwestern Jamaica on October 28th as a Category 5 hurricane; then near Chivirico, Santiago de Cuba Province in Cuba as a Category 3 storm; and finally crossing the central and southeastern Bahamas as a Category 1 and 2 storm on October 29th. This was the 13th named storm and the fourth major hurricane of the 2025 North Atlantic hurricane season. For Jamaica, Melissa marked the first Category 5 hurricane to make landfall since records began in 1851.
Jeff Waters, Director of North Atlantic Hurricane Models at Moody’s, commented, “Hurricane Melissa was a generational event for Jamaica and will be the defining storm of the 2025 North Atlantic hurricane season. While Kingston was largely spared from damaging winds, other towns were devastated by a combination of catastrophic winds and widespread inland flooding. Given Jamaica’s island nature, repairs and recovery will face significant supply chain challenges, despite several key ports remaining operational. Recovery is likely to take months, if not years.”
Building Resilience and Insurance Gaps
Raj Vojjala, Managing Director of Modelling and Analytics at Moody’s, added, “In collaboration with local re/insurers, field surveys revealed a stark contrast in building quality between insured and uninsured properties in Jamaica. Insured buildings, typically made from concrete or reinforced masonry, are designed to withstand high winds and seismic activity. In contrast, many uninsured homes lack wind-resistant features, resulting in widespread damage in communities across the island.”
Moody’s modelled loss estimates are based on the latest data from the 2025 Caribbean Hurricane industry exposure database and the RMS Version 25 North Atlantic Hurricane Models.
Other Loss Estimates
Other catastrophe modelling firms have also provided estimates for the insured losses from Hurricane Melissa. Karen Clark & Company (KCC) predicts private insured losses of around $2.4 billion, including damage to residential, commercial, and industrial properties in Jamaica and Cuba. Cotality estimates the total insured losses will range from $1 billion to $2.5 billion, with total property damage from wind, storm surge, and flooding expected to range from $5 billion to $9 billion.
The Extreme Event Solutions group at Verisk anticipates that industry-insured losses for onshore property in Jamaica could range from $2.2 billion to $4.2 billion. Meanwhile, AccuWeather’s preliminary estimate suggests total damage and economic losses from the storm could be between $48 billion and $52 billion.
Re/insurance broker Aon warns that the overall economic and insured losses could end up in the single-digit billions of USD, with further damage assessments potentially pushing this number higher.
Jamaica to Receive Record Payout
In addition, Jamaica is set to receive a record payout of $70.8 million (J$11.4 billion) under the Caribbean Catastrophe Risk Insurance Facility’s (CCRIF) parametric insurance model. This will help cover some of the country’s disaster-related losses.