Lloyd’s of London insurers dropped amid speculation that they will suffer losses from Tropical Storm Harvey that’s battering Houston, the epicenter of the U.S. oil industry.
The storm, which which made landfall as a category 4 hurricane and then drifted into the Gulf of Mexico, may cause as much as $50 billion of damage in total, Barrie Cornes, an analyst at Panmure Gordon & Co., wrote in a note to clients on Monday. He estimated costs of 200 million pounds ($259 million) for Lancashire Holdings Ltd. and 100 million pounds each for Hiscox Ltd. and Beazley Plc.
Lancashire slipped as much as 4 percent in London, the most since May 5, and was down 3.6 percent as of 10:28 a.m. Hiscox fell as much as 3.3. percent and Beazley was 2 percent lower.
Loss estimates for Harvey vary widely, with David Havens, an insurance analyst at Imperial Capital, saying the costs could surpass $100 billion. Hurricane Katrina in 2005 became the most expensive hurricane to hit the U.S., costing about $118 billion, while Hurricane Sandy in 2012 left some $75 billion of damage.
It’s still too early to assess the damage from Harvey, which has so far “mostly hit a relatively sparsely populated area with comparatively little objects of value,” Ernst Rauch, head of Munich Re’s Corporate Climate Center, said in an email.
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