Fitch Ratings expects Hurricane Otis’ effects on Mexico’s insurance industry to be controlled and within its current ratings expectations, the agency said in a statement on Wednesday.
“Fitch Ratings expects that the credit impact will be negligible on the Mexican insurance industry’s profitability and that it will not affect the capital of individual reinsurers,” the agency said.
Otis, which devastated the tourist beach resort of Acapulco and surrounding communities as a Category 5 hurricane on Oct. 25, caused damages with resulting economic losses worth upwards of $16 billion, Fitch said.
“The (insurance) sector is well capitalized and regulated, with low market penetration and a high cession rate that reduces profits and capital pressures for local private insurers, therefore it will withstand insured losses due to the storm,” Fitch added.
(Reporting by Raul Cortes Fernandez; writing by Brendan O’Boyle; editing by Sandra Maler)
Photograph: Damage is seen at a yacht club in the aftermath of Hurricane Otis in Acapulco, Mexico, on Saturday, Oct. 28, 2023. (AP Photo/Felix Marquez)
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