Shares in insurers up as Hurricane Irma costs limited to €33bn

Shares in insurers jumped in markets from Europe to Florida amid signs that predictions about Hurricane Irma’s damage were excessively dire.

Giant reinsurers like Swiss Re and Munich Re, which shoulder risks for local insurers around the world, posted their biggest gains of the year.

Universal Insurance Holdings, the largest provider of residential coverage in Florida, jumped 15% at one stage in New York, regaining some of its losses from last week.

The storm shifted to Florida’s Gulf Coast over the weekend, sparing Miami a direct hit and prompting risk modeler AIR Worldwide to say the maximum cost for insurers on Irma is $40bn (€33.3bn). Prior worst-case scenarios from analysts and ratings firms were more than $100bn.

“As destructive as Irma’s path continues to be, we think that the path up the west coast of Florida is better from an insured loss standpoint than projections from mid last week and even Friday,” Ryan Tunis, an analyst at Credit Suisse, said in a note to investors. “While Irma may be costly to reinsurer book values, Irma alone should not trigger the need for additional capital,” he said.

Aspen Insurance Holdings led gains among Bermuda-based carriers, surging 13%. Validus Holdings, Everest Re and XL Group each jumped at least 6%.

“There will be loss-driven price increases in certain areas” next year, Hannover Re chief executive Ulrich Wallin said at a press conference in Monte Carlo where reinsurers are holding their annual meeting with brokers and clients. “I don’t think we’ll have a market dislocation, but the hurricane season lasts until the end of November, and climate conditions seem to be quite conducive to hurricanes,” he said. Estimates on claims from Irma still varied widely. Risk modeling firm AIR Worldwide estimated insured losses in the US at between $20bn and $40bn, while Enki Research sees them at about $19bn.

There’s a 10% chance of insured wind losses from Irma exceeding $60bn, catastrophe risk modeling firm RMS said on its website over the weekend.

Bloomberg


Related Articles

More than 100 prisoners captured after Hurricane Irma jail escape

Trump travels to Florida to assess Hurricane Irma damage

Islanders tell of terror with prisoners on loose following Hurricane Irma

Eight elderly in nursing home among more than 80 dead in Hurricane Irma

More in this Section

Is this the end for zero-hour contracts?

The European Union seeks tax rule action

Despite the ticking clock, some optimism over sterling

Tesco shares climb on green light for Booker deal


Breaking Stories

Brexit weighs on business sentiment

Lifestyle

A towering achievement: Exploring Irish castles and beautiful buildings

Books that belong on the gardener's bookshelf

The domestic flash of Francis Brennan

John Wilson touring with music made with Rory Gallagher in Taste

More From The Irish Examiner