While the potential impact of hurricane Irma on the state of Florida remains uncertain as the storm tracks towards the U.S. coast, Standard & Poor’s (S&P) has warned that the insured loss could “much higher” than that seen with hurricane Harvey.
In a recent report, global ratings agency S&P has warned that Irma could drive losses for the global insurance and reinsurance industry that are far higher than the potential Harvey insured loss.
The economic and insured loss from Harvey, which impacted parts of Texas and Louisiana recently, remains unclear, but estimates point to an insured loss of up to $35 billion, with a $40 billion maximum loss, which includes up to $10 billion for the National Flood Insurance Program (NFIP), with the rest falling on the private market.
And now, S&P has warned that insured losses from Irma could be higher than seen with Harvey, likely owing to increased property values along the Florida coastline and possibly higher insurance penetration than seen with Harvey.
Commenting on the impact of Irma, Hardeep Manku, S&P Global credit analyst, said; “Strong capitalization will help mitigate the impact, but Irma will likely stress-test not only the re/insurers but also the staying power of third-party capital.
“Regional pricing is also likely to harden, but the impact on global re/insurance pricing is
debatable.”
