After devastating Florida’s west coast as a strong Category 4 storm before weakening over land, Hurricane Ian is likely to bring incurred losses in US fire and natural hazards market to near record levels, according to analysts at GlobalData.
Benjamin Hatton, Associate Insurance Analyst at GlobalData, described the storm as one of the strongest hurricanes the region has felt in year, and that it is likely to cause billions of dollars’ worth of losses.
Based on its strength, hurricane Ian was one of the strongest storms to ever make landfall in Florida, with sustained winds of 155 mph ensuring it’s a top-five event for the state.
Hatton, commented: “Combined with the losses from earlier in the year, Hurricane Ian is likely to leave insurers with their largest incurred loss since at least 2017 when a series of devastating hurricanes and wildfires took their toll on the country.
“That year incurred losses in the fire and natural hazards line reached almost $25 billion, with a loss ratio comfortably over 90%.”
Moreover, according to GlobalData’s recent report, titled ‘Climate Change and its Impact on Insurance Market – Thematic Research’, the US gross written premiums for fire and natural hazards insurance was over $58 billion in 2020, which was more than twice the amount of Japan, which came in as the second highest.
Hatton, continued: “As damaging as the effects of natural disasters can be, insurance uptake across the US tends to be relatively high. Insurance will continue to provide that vital safety net for both consumers and businesses in disaster-prone areas.
“As climate change continues to generate such destructive weather events, creating access to insurance for more consumers—in all parts of the world—will help to soften the blow as people’s lives and livelihoods are torn apart. While insurance provides valuable financial support to many, it can also alleviate global income inequality that is regularly worsened by such disasters.”
