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Analysts Warn of Effects of Hurricane Laura Losses on P/C Insurers – Insurance Journal

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Ratings analysts A.M. Best and Moody’s are expecting property/casualty insurers and reinsurers to suffer meaningful losses from Hurricane Laura.

A.M. Best expects losses from Hurricane Laura to place added stress on its rated insurance companies’ balance sheets, which it adds have already been weakened by the COVID-19 pandemic.

While reinsurance may help mitigate losses, the losses from the hurricane will challenge future risk management strategies, as loss-affected areas will see increases in reinsurance rates that are already hardening, A.M. Best says in a commentary, “Hurricane Laura Losses Could Further Stress Insurers’ 2020 Earnings.”

A.M. Best states that although the capital position of smaller companies may be at greater risk, “prudent enterprise risk management strategies could result in losses that affect earnings more than capital.”

The A.M. Best commentary further notes that many rated insurers have purchased first-event cover well-above the estimated loss associated with a 1-in-100-year hurricane, and programs often include drop-down and reinstatement features that insulate a company from a second event.

Louisiana and Texas Markets:…



Read More: https://www.insurancejournal.com/news/national/2020/08/27/580547.htm

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Source: https://www.insurancejournal.com/news/national/2020/08/27/580547.htm

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