Hurricane Hermine’s trail of destruction could cost carriers up to $500 million in insured losses, but the industry could take the hit, analysts said in a recent report from Fitch Ratings.
Fitch was citing an estimate from Karen Clark & Co., a “catastrophe modelling” consultancy based in Boston.
However, total economic damages could run up to $1 billion in Florida and across other southeastern states, according to Fitch.
Insurance firms have enough to cover the losses, although the claims could drag down third quarter earnings.
Major players in the state include Universal Insurance Holding Group, Tower Hill,
State Farm Mutual, Citizens Property Insurance and Federated National Insurance, Fitch stated.
Hermine was a Category 1 storm and was the first hurricane to land in Florida since Wilma in 2005.
Since then, Fitch said that the risk has moved from Florida’s state run insurer, Citizens, to smaller, specialist carriers who now control 60% of the market.
“(The) ability for these companies to quickly and effectively assess and pay losses during a substantial increase in claims from a large hurricane landfall is uncertain. Loss experience from Hermine will provide insight into the preparedness of the Florida specialist companies for the next significant storm that hits the state,” Fitch concluded.
