Hurricane Irene, while inflicting severe economic damage, will come in far behind the most severe storms to strike United States in recent years, according to a new report by Fitch Ratings.
At over $45 billion of insured losses, Hurricane Katrina remains the most financially devastating hurricane in U.S. history.
However, Irene’s most troublesome aspect will be the substantial flooding, according to Fitch Rating’s Senior Director Brian Schneider.
“While many commercial and crop insurance policies cover flood losses, homeowner policies generally do not,” said Schneider. “There is also the potential for business interruption losses as the affected areas work to recover from the storm.”
While AIR Worldwide is estimating $3-$6 billion in insured losses, projections from EQECAT Inc. are coming in notably lower at between $1.8-$3.4 billion. Economic damages figure to come in substantially higher at over $10 billion.
Forecasters are also saying there is a realistic chance that a major hurricane will make landfall in the United States or Caribbean before the year is out, which is potentially bad news for insurers and reinsurers.
“(Re)insurers are already absorbing very high losses and now we enter September, historically the most active month of hurricane season,” said Schneider.
Even so, Schneider added Fitch expects U.S. property/casualty insurers to be able fully absorb losses brought on by Hurricane Irene.
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