A.M. Best says year-to-date 2016 results in Texas alone appear to have already met the nine-year average for hail storm damage in the United States.
According to Best’s Briefing, titled, “Texas Hail Storm Damage Poised to Exceed Nine-Year Average—And It’s Only April,” data compiled from numerous sources states that total hail damage in the United States in 2015 was below the nine-year average of $1.2 billion.
Insured losses from two hailstorms in March 2016 are currently estimated at $1.3 billion, and this total is expected to climb. A third hailstorm that hit in Texas in mid-April is expected to be worse than the first two, although it is still too early to estimate losses.
The ratings agency expects limited rating actions to result due to the devastating springtime hailstorms in the Dallas-Fort Worth region of Texas, as affected property/casualty companies are expected to maintain sufficient overall risk-adjusted capitalization relative to their existing financial strength ratings, according to a new A.M. Best briefing.
For property insurance writers, losses are expected to stem from broken windows and roof damage. Although, many companies appear well-prepared to handle these types of events, early indications show that these events will have an impact on underwriting performance and overall earnings.
Companies with a heavy concentration of automobile physical damage will also have significant losses. Nevertheless, the impact on most automobile physical damage writers is expected to be mitigated given the generally large economies of scale of major writers in the market.
Source: A.M. Best
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