Insurance industry prepared to handle hurricane season

insurance news - atlantic hurricane season

Insurance industry will be capable of handling threats of the 2013 hurricane season

There are many concerns swirling around the U.S. concerning this year’s hurricane season. Many of these concerns relate to the impact that 2012’s Hurricane Sandy had on the East Coast. This single event caused more than $75 billion in damages in the U.S. and elsewhere and is considered the second costliest hurricane the country has ever seen. The National Oceanic and Atmospheric Administration recently announced that it predicts as many as 6 major hurricanes to form in the Atlantic Ocean this year, but the insurance industry may be able to withstand the damages these storms represent.

Fitch provides some insight on the insurance industry and the matter of reinsurance

Fitch Ratings, a leading ratings agency service the insurance agency, has announced that it expects the U.S. insurance industry to have the capacity to withstand the perils of the hurricane season. The agency notes that there is sufficient room left within the reinsurance market to provide coverage to U.S. insurers, protecting them from the impact of any major storm. Fitch has released a report concerning the issue, offering some insight into the insurance industry and the risks it faces during the hurricane season.

insurance industry - hurricane seasonHurricanes have yet to destabilize industry

While hurricanes represent a major problem for the insurance industry, as evidenced by 2012’s Hurricane Sandy and 2005’s Hurricane Katrina, these events have not yet managed to destabilize the industry in any significant fashion. This is partly due to the fact that the majority of the damages caused by hurricanes are from flooding, which is not something that the insurance industry handles directly. Floods are almost exclusively a matter for the federal government, managed through the National Flood Insurance Program.

No guarantee that any major storms will make landfall this year

Hurricane Sandy is not the only disastrous storm to hit the country in 2012. Hurricane Isaac also visited the U.S., generating steep losses for the insurance industry and putting more financial pressure on the homeowners insurance sector. There is no guarantee that any of the major hurricanes that are expected to form in the Atlantic Ocean this year will actually make landfall. The insurance industry is prepared to handle these disasters if they do come ashore, however.