Debby unlikely to affect reinsurers, says Moody's
Tropical Storm Debby slammed into Florida on Monday with heavy rain and high winds, contributing to at least five deaths and causing widespread flooding.
The storm is now making its way up the US East Coast, threatening record flooding in Georgia and South Carolina.
But Moody's rating agency said the storm was likely to fall within insurers' retentions and would not impact their reinsurance coverage.
The Associated Press said record-setting rain was causing flash flooding, with up to 30 inches possible in some areas, the National Hurricane Center said.
About 500 people were rescued from flooded homes in Sarasota, Florida, a beach city popular with tourists, the Sarasota Police Department said in a social media post. It was one of the cities hardest hit by flooding on Monday.
“Essentially we’ve had twice the amount of the rain that was predicted for us to have,” Sarasota County Fire Chief David Rathbun said in a social media update.
Moody's said rising retention rates meant reinsurers were unlikely to be affected by the hurricane.
“We expect a majority of insured losses from Hurricane Debby to fall within primary insurers’ retentions under their reinsurance coverages," said James Eck, VP-senior credit officer, financial institutions group. "In general, primary insurers are retaining more risk this hurricane season as attachment points - the threshold at which a policy begins to cover a loss – have moved higher over the past few years, with primary companies taking on more of the loss burden from reinsurers for small to midsize catastrophe events.”
Moody's, which rates insurance companies and offers modelling expertise through subsidiary RMS, said rainfall and flooding from Debby could challenge historical precedents in Georgia and South Carolina as it progresses north.
“Debby's hurricane-force winds, storm surge, and heavy rainfall could have localised impacts in the Gulf coast region. Debby's forecast winds, rainfall, storm surge and the associated risk of tornadoes highlight the multifaceted nature of hurricane-related risks facing insurance industries," said Sarah Hartley, director of Moody’s RMS Event Response.
Florida Governor Ron DeSantis warned that the state could continue to see threats as waterways north of the border fill up and flow south.
“It is a very saturating, wet storm,” he said during an afternoon briefing at the state’s emergency operations centre. “When they crest and the water that’s going to come down from Georgia, it’s just something that we’re going to be on alert for not just throughout today, but for the next week.”
Debby made landfall along the Gulf Coast of Florida early Monday as a Category 1 hurricane. It since has weakened to a tropical storm and is moving slowly, covering roads with water and contributing to at least five deaths.
The potential for high water also threatened Savannah, Georgia, and Charleston, South Carolina.
Local leaders in Savannah said flooding could happen in areas that don’t usually get high water if Debby stalls out over the city. With winds and rainfall expected to worsen overnight, authorities issued a curfew from 10 p.m. Monday until 6 a.m. Tuesday.
“This type of rain hovering over us, coming with the intensity that they tell us it is coming, it’s going to catch a whole lot of people by surprise,” said Chatham County Chairman Chester Ellis.
In South Carolina, Charleston County Interim Emergency Director Ben Webster called Debby a “historic and potentially unprecedented event” three times in a 90-second briefing on Monday morning.
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