Primary insurers to bear most of hurricane Florence’s losses
Primary insurers (including auto insurers) are expected to bear most of the losses from hurricane Florence, according to Keefe, Bruyette & Woods (KBW) analysts.
Hurricane Florence, once a category 4 storm, made landfall near Wrightsville Beach, North Carolina, on Friday (Sept. 14), as a category 1 storm with 90 mph winds.
Industry insured losses resulting from Hurricane Florence’s winds and storm surge will be between $1.7 billion and $4.6 billion, according to estimates by catastrophe risk modelling firm AIR Worldwide.
AIR's loss estimates include residential (including 5 percent of modelled storm surge as wind losses and additional living expenses), commercial (property damage and business interruption), industrial, and auto property damage losses (assuming 100 percent of storm surge damage), KBW noted. However, the initial loss estimates exclude precipitation-induced flood, National Flood Insurance Program (NFIP) losses, uninsured properties, infrastructure, inland marine losses, extra-contractual obligations, vandalism/civil commotion, and other non-modelled losses (including tornadoes spawned by the storm).
KBW expects primary insurers to have meaningful Florence exposure, but losses should be absorbed within third quarter 2018 catastrophe provisions.
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