NFIP, Private Flood Insurance Carriers, Auto Writers Will Handle Brunt of Florence Losses.
NFIP, Private Flood Insurance Carriers, Auto Writers Will Handle Brunt of Florence Losses
The National Flood Insurance Program, private flood insurance carriers and auto insurance writers will likely deal with the bulk of insured losses from Hurricane Florence, Fitch Ratings said in a new update.
Reinsurers and insurance-linked securities will emerge from the catastrophe relatively unscathed, Fitch predicted, envisioning that both will deal only with "a modest level of losses."
Rather than submit an estimate of insured losses, Fitch said that loss estimates are premature because parts of the Carolinas aren't too accessible yet. At the same time, there are a number of insured loss estimates in play, and they vary. Fitch notes, for example, that AIR Worldwide said insurance industry losses relating to Florence should hit between $1.7 billion and $4.6 billion, excluding the impact of flooding from ongoing rains. Willis Towers Watson (https://www.carriermanagement.com/news/2018/09/17/184286.htm) placed that figure between $2.5 billion and $5 billion, and Karen Clark & Co. estimated $2.5 billion in insured losses.
Fitch said that flood losses from Florence will likely be a large part of the total and pointed out that the NFIP will likely bear the brunt of this. Still, the federal agency has added a number of risk transfer mechanisms to its structure, and Fitch said the efforts have helped shift some of the risk to both capital markets and traditional reinsurers.
Who will be affected in the private market? That would be some surplus lines writers, admitted companies and Lloyd's of London syndicates.
While some flood-related Florence losses will be covered, Fitch said a significant amount won't be, because the affected counties have a low take-up rate for flood insurance, including inland areas not typically considered at high risk.
Source: Fitch Ratings
|Printer friendly Cite/link Email Feedback|
|Date:||Sep 20, 2018|
|Previous Article:||COUNTRY Financial Chooses Jacobs as New CEO.|
|Next Article:||Compassion and Insurance.|