Standard & Poor’s has predicted that the industry losses left by the storm will not have a significant financial impact.
The Standard & Poor’s rating agency announced it doesn’t feel the Hurricane Florence insurance losses will be anything the industry cannot manage. Moreover, it forecasted that the insurance and reinsurance industries will not be significantly impacted by those losses.
Despite the “material insured losses” left by the hurricane, the storm is not expected to harm insurers.
The North Carolina coast was the first to be struck when the storm made landfall. That said, the Hurricane Florence insurance losses are well within the industry’s ability to manage. Though it is too early to be able to come up with accurate estimates as to the damage left behind by the storm, the total is not expected to cause either the insurance or reinsurance industries notable harm.
The statement from Standard & Poor’s said that most of the insured losses left behind by Hurricane Florence are most likely to be covered by the primary insurance companies. This means that the reinsurance industry will remain primarily untouched by this particular storm. Insurance companies in Georgia, North and South Carolina tend to expect a higher catastrophe loss total, and this storm is not likely to have crossed the manageability threshold.
The Hurricane Florence insurance losses were expected to be much higher than they are likely to be.
Forty eight hours before Hurricane Florence made landfall, the storm was expected to leave much greater devastation behind. That said, the storm weakened quickly, meaning that the insurance industry’s losses are more likely to come from the impact of water than damaging winds.
“The combined earnings for U.S. insurance and the global reinsurance sectors will be sufficient to absorb the total year-to-date natural catastrophe losses. Therefore, we expect minimal rating actions, if any,” said the ratings agency.
Early estimates suggest that Hurricane Florence insurance industry losses could be more than $8 billion. However, even at that level, Standard & Poor’s doesn’t expect the storm to be a capital event. Instead, it will reduce insurance and reinsurance company earnings totals for the year.