Yesterday it was reported how US insurance stocks were negatively impacted by Hurricane Harvey – now it has been revealed that Lloyd’s of London insurers are also feeling the brunt.
A report by the Evening Standard
’s shares dropped 3.6% on Tuesday, while Hiscox
saw a 3.8% decline. Shares in Beazley
suffered a smaller decrease of 2%.
According to British investment bank Panmure Gordon, estimated losses are pegged at £200 million for Cathedral Capital owner Lancashire and at £100 million each for Hiscox and Beazley.
“The greatest risk for insurers would likely be from windstorm damage and storm surge rather than flooding from heavy rain,” read a Barclays Plc note, as quoted by Bloomberg
. In addition, part of the flood losses will be covered by the US National Flood Insurance Programme.
Morgan Stanley, on the other hand, said the extensive flooding in Texas could cause more insured losses than wind. According to a note published by the bank, Hurricane Harvey would be the fourth worst storm to hit the US, based on estimated damages – next to Katrina, Sandy, and Andrew.
Meanwhile, Peel Hunt analyst Andreas van Embden noted, as quoted by The Telegraph
: “The main uncertainty is around commercial property and business interruption claims, particularly now the Houston metropolitan area is being affected.”
Insurers hit with big drops as Harvey costs mount up