Here are the insurers who will face the biggest hit from Harvey

Here are the insurers who will face the biggest hit from Harvey

Here are the insurers who will face the biggest hit from Harvey Morgan Stanley believes that major insurers operating in Texas could stand to lose billions of dollars to claims made following Hurricane Harvey – with State Farm and Allstate to take the bulk of the hit.

The bank said that if media reports on the hurricane’s damage – ranging between $30 billion and $40 billion – are correct, then Harvey would rank as the fourth worst storm in US history, when adjusted for inflation.

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Although Harvey brought strong winds to Texas, it was the severe, flood-causing rainfall that caused the most damages, Morgan Stanley observed.

“Early estimates on wind losses from RMS are in the low single digit $billions. Flooding has been extensive and could cause more insured losses than wind,” the bank said in its release.

The bank also found that in Texas, the 10 largest homeowners’ insurers are responsible for the bulk of that market, and thus are anticipated to lose the most.

“The homeowners market is concentrated (the top-10 account for ~77% of the market), but wind losses could be less than flood losses,” it said.

State Farm commanded the largest homeowners’ market share, at 21.5%. Allstate came in second, with 12.7%, followed by Farmers with 10.9%. Of the rest that made the list, USAA has 10.1% of the market, Liberty 8.2%, Travelers 3.7%, Nationwide 3.0%, Texas Farm Bureau 2.8%, PGR 2.2%, and CB 2.1%.

Business Insider reported that the stock prices of Allstate and Travelers were down 1.53% and 2.63%, respectively, Monday afternoon.

By comparison, the state’s commercial insurance market is much more fragmented.

“In the commercial market, the top-10 account for only about 55% of the market (with the largest two writers including Hartford Financial Services and Travelers),” it said.




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6 Comments
  • Joe L. 8/30/2017 1:13:32 PM
    Great article regarding the devastation in Texas caused by "Harvey". Though it points out that wind damage caused by the storm is covered by a Homeowner's policy, the article was somewhat misleading regarding damage caused by Flooding. Your typical Homeowner's Policy, specifically excludes damage caused by flooding. Flood Damage is covered by a separate Flood Insurance Policy generally written directly with the National Flood Insurance Corp, an organization managed by F.E.M.A.
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  • Laura 8/31/2017 8:40:57 AM
    I agree with the poster above...I would like to see how this will impact the carriers on the personal auto side, as that is where most insurers will see significant claims. Since flood is excluded from the home policy, the carriers listed as having a large market share of home policies won't be impacted due to the flood claims.
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  • Bristol Haughton 8/31/2017 2:21:50 PM
    I read somewhere that only about 15% of the homeowners had purchased Flood Coverage. I know there was a lot of wind damage but what I see on TV most houses are flooded rather than wind damaged. Why are the two insurance companies projecting such high losses where they is no coverage for the flood damage ?
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