- Analysts say Harvey’s timing is good for insurers and insurance customers in one sense: Personal and commercial insurers have record levels of capital, thus the storm is unlikely to cause extensive damage to the industry’s financial strength.
- It would take $100B or more of losses in a 12-month period to cause distress within the insurance industry, analysts estimate; Hurricane Katrina in 2005, the costliest hurricane in U.S. history, caused nearly $50B in insured losses in 2016 dollars, according to Wells Fargo (NYSE:WFC).
- While the industry is strong overall, companies with large Texas operations could suffer short-term hits; the top homeowners insurers in Texas are State Farm, Allstate (ALL -1.3%) and Farmers, while the top personal auto insurers in the state are State Farm, Berkshire Hathaway (NYSE:BRKa)'s (BRK.A, BRK.B) Geico and Allstate.
- The worst damage from the storm is expected to be caused by flooding, which is not typically covered by homeowners insurance; flood damage usually is backed by the National Flood Insurance Program.
- FBR analysts expect Harvey will generate moderate catastrophe losses for property and casualty insurers.
- Other relevant tickers include: AIG -0.6%, HIG -1.7%, MET -0.6%, NGHC -2.3%, PGR -2.7%, SNC -0.6%, TRV -2.9%.
- Now read: AIG: Carl Icahn Backs Down
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