Ian could cost re/insurers up to $35bn
Major hurricane Ian that made its Florida landfall at Category 4 status near Cayo Costa on 28 September could create losses for re/insurers of up to $35 billion.
By 05:00 local time, the National Hurricane Center (NHC) had downgraded Ian to a tropical storm, but it was still expected to produce strong winds, heavy rain and storm surge across portions of Florida, Georgia and the Carolinas when it turns north up the coast.
BMS Group estimates Ian, after shifting east, may cause an industry loss of more than $20 billion. Guy Carpenter provides a wider range with a $10-$35 billion industry loss estimate. Karen Clark & Company’s (KCC) initial high estimate of $32.5 billion was based on a scenario where Ian made landfall nearer to Tampa, FL. Based on current tracking, KCC’s more likely scenario is an industry loss estimate of ~$19 billion, analysts at Morgan Stanley noted in a morning round-up. Industry losses are worsened by the speed Ian is moving which can cause prolonged exposure to severe weather.
For reinsurers, analysts at Wells Fargo assumed that Allstate and Progressive will both tap their programmes while Chubb will get to its $1 billion per-occurrence retention threshold and a headline price tag could eventually "place further upward pressure on reinsurance pricing heading into the Jan 1 renewal period”.