Re/insurers brace themselves for $20bn hit from Florence
The re/insurance industry should brace itself for losses of between $15 billion and $20 billion, according to the guidance of risk modelling agencies and analysts.
RMS, while stressing it has not yet put out official loss estimates for Florence, does note, however, that it is similar to the two previous hurricanes that hit the area: Hurricane Hazel, which caused $15 billion in losses in 1954, and Hurricane Hugo, which caused $20 billion in 1989 – both totals adjusted to what they would cost today.
Fitch has noted that primary property/casualty insurance writers across the multi-state forecast landfall area are expected to incur losses primarily from the high winds that are accompanying the storm toward the coast. The threat of extreme flooding has implications for the National Flood Insurance Program (NFIP), private market flood insurers, personal and commercial automobile writers, traditional reinsurers, and Insurance Linked Securities (ILS) markets.
Top-five homeowners writers as measured by statutory direct written premiums in NC, SC, GA and VA include State Farm Mutual Insurance Group, United Services Automobile Association (USAA), The Allstate Corporation, Nationwide Mutual Insurance Group and Travelers Companies, according to Fitch.
The top-five commercial writers (Inland Marine, Allied Lines, Fire, Commercial Multi-peril non-liability) as measured by statutory direct written premiums in NC, SC, GA and VA include Liberty Mutual Insurance Group, CNA Financial Corporation, Travelers, Nationwide, and American International Group (AIG).
Top-five private flood writers as measured by statutory direct written premiums in NC, SC, GA and VA include FM Global Group, AIG, Assurant, Zurich American Insurance Group and Swiss Re America Group.
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