Business insurance

Best comment: Hurricane Ida losses are manageable for the insurance industry


OLDWICK, New Jersey – (COMMERCIAL THREAD) – Hurricane Ida’s track and proximity to the New Orleans area could tip insured losses further towards the commercial insurance industry, news reports AM Best report.

Property damage and business interruption may contribute more to overall losses than Hurricane Laura last year, which had a bigger impact on personal business. Louisiana insurers are already trying to beat the 2020 peak in weather-related losses, with more than 300,000 claims attributable to Hurricanes Laura, Delta and Zeta, according to the report.

The Best commentary also notes that an increase in demand for materials and goods after Hurricane Ida could significantly increase the level of (re) insured losses, especially in light of a 5.4% increase in the index of US consumer prices compared to about a year ago.

The total losses from Hurricane Ida are not expected to impact overall capital levels due to the number of regional players in the market who will likely be able to cede larger losses to the reinsurance industry.

However, the (re) insurance industry should be able to absorb the scale of the losses without affecting its capital position. Hurricane Ida will add uncertainty to the increasing frequency of weather events and boost reinsurance pricing.

Hurricane Ida, which made landfall on the 16the anniversary of Hurricane Katrina, generated a less violent storm surge. Improvements in infrastructure since 2005 could reduce losses, as the new dike systems have so far worked as intended.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=312194.

AM Best is a global credit rating agency, news publisher, and data analytics provider specializing in the insurance industry. Based in the United States, the company operates in more than 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information visit www.ambest.com.

Copyright © 2021 by AM Best Rating Services, Inc. and / or its affiliates. ALL RIGHTS RESERVED.


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