Hurricane Matthew may cause $25-30 bln in insurance losses and become the second costliest U.S. hurricane on record for insurers, according to initial industry estimates. Bobbi Rebell reports.
Hurricane Matthew will be a major test for the U.S. insurance industry. Early estimates are for insurance losses of $25-30 billion making it potentially the second costliest U.S. hurricane on record for insurers. Hurricane Matthew worked its way up Florida's Atlantic coast causing disruptions to air travel, manufacturing, supply chains and retail stores. Some, like Home Depot, activated hurricane command centers to stock their stores with emergency supplies. Data modeling firm RMS has told clients its initial estimates were a 42 percent chance of a $20 billion insurance loss and a 26 percent chance of a $30 billion loss from the hurricane, according to a source familiar with the research. Laura Adams is senior insurance analyst at insuranceQuotes. (SOUNDBITE VIA SKYPE) LAURA ADAMS, SENIOR INSURANCE ANALYST, INSURANCEQUOTES, (ENGLISH) SAYING: "It's possible that the hurricane could do the kind of damage that Katrina did. It really does depend on what level of wind comes on shore. And we've seen, you know, what's happened so far in Florida, a lot of the states above Florida, we will have to see what the damage is there." While the hurricane represented a "real test" of reinsurers' exposure, S&P Global says it did not see a ratings impact, because of reinsurers' strong capital buffers.