According to Fitch Ratings, Hurricane Charley will represent only a material loss to the insurance industry because of the relatively wide range ($5 billion – $10 billion) of insurance loss estimates could be revised significantly once actual storm parameters are available.
However, a loss even at the low end of the estimates will rank Hurricane Charley as the third largest insured U.S. hurricane loss in history.
Fitch said that Charley is not expected to trigger a loss to any of the catastrophe bonds in the Fitch rating universe, but that will not be known for certain until better loss estimates become available.
The insurers most likely to be affected by the storm are those writing primary property insurance (homeowners or commercial multi-peril) in the state of Florida or those selling property catastrophe reinsurance.
Many of the insurers with significant market share in the property lines in Florida are geographically diversified in risk and have high insurer financial strength ratings. However, there are insurers with a geographical concentration of risk in Florida that could be materially affected.
Charley came ashore Friday, Aug. 13 on the Gulf Coast of Florida just south of Fort Myers as a Category 4 hurricane. The storm then crossed the state of Florida over Orlando and headed back out into the Atlantic Ocean before moving north to the Carolinas.
Fitch issued a special report titled ‘Hurricane Charley: Preliminary Analysis’, which is available on the Fitch Ratings web site.
Was this article valuable?
Here are more articles you may enjoy.