Hurricane Ian a wake-up call for insurers as losses forecast to hit $75bn
Hurricane Ian is set to become the most significant natural disaster for the insurance sector in decades after it swept through Florida and South Carolina, industry figures have warned.
Initial forecasts for the industry’s losses from the storm have reached as high as $75bn, which would make it the costliest natural disaster ever in nominal terms. In real terms, only 2005’s Hurricane Katrina, which generated insured losses of $65bn —$99bn in 2022 money — has inflicted greater losses.
Ian hit Florida’s west coast on September 28 near the town of Fort Myers as a Category 4 storm, crossed the state to the Atlantic and then went on to hit South Carolina on September 30. At least 127 people died in Florida alone.
The fallout from Ian comes just as the industry was already grappling with several headwinds, including losses stemming from the war in Ukraine and billions of dollars of claims for losses resulting from the coronavirus pandemic. At the same time, higher inflation has driven up the cost of meeting many claims.
Meanwhile, losses from the storm are likely to push a further series of small, local insurers in Florida into insolvency, in a market where six have already been forced to seek protection from creditors this year.
Patrick Davison, underwriting director at Lloyd’s Market Association, which represents members of London’s Lloyd’s insurance market, said there were “clear opportunities” for the best-performing insurers in what he called a “tough catastrophe environment”.
This story originally appeared on: Financial Times - Author:Robert Wright
