Press Release - OCTOBER 10, 2018
Best’s Briefing: Insurers, Reinsurers Brace for Hurricane Michael Catastrophe Losses
FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 10, 2018
The Best’s Briefing, “Insurers and Reinsurers Brace for Hurricane Michael Catastrophe Losses,” states that A.M. Best does not anticipate a large number of rating actions related to Hurricane Michael, as catastrophic events such as this one already have been considered in insurance companies’ current ratings and outlooks. Insurers with the largest market shares in U.S. states to be hit by Hurricane Michael have considerable exposures, but these are manageable given each company’s overall policyholder surplus.
Furthermore, while nearly all A.M. Best-rated Florida property companies have substantial property catastrophe premium, some have strategically limited their exposures in the panhandle, and therefore are not significantly exposed to this hurricane. However, the question of how the state’s relatively new, Florida-specific insurers might withstand the impact of substantial insurable losses caused by Hurricane Michael remains. In addition, depending on the storm’s intensity after making landfall, the potential for insurable losses could put some pressure on reinsurers. The actual impact of the hurricane will depend on a number of yet undetermined factors, but A.M. Best believes that most of the affected rated carriers have sufficient capital and appropriate reinsurance programs to withstand this event effectively.
The potential for a substantial number of claims to arise from storm surge and inundation-related damage attributable to Hurricane Michael also could exacerbate Florida’s continuing assignment of benefits problems. With Hurricane Michael hitting central and northwest Florida, A.M. Best believes the difficulties property writers have been encountering may get worse before any efforts to curtail the recent trend can take hold. An escalation could limit consumer choice if insurers cease writing or begin non-renewing policies in areas with a high volume of water losses. A.M. Best has already observed a decrease in appetite for risks in the southeast Tri-County area, which to date has been most impacted by the assignment of benefits issue.
To access the full copy of this briefing, which includes Top 10 lists of companies in Florida whose direct written premiums in the state represent the highest percentage of the companies’ total direct written premiums, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=278969 .
A.M. Best is a global rating agency and information provider with a unique focus on the insurance industry.