Already a Bloomberg.com user?
Sign in with the same account.
CHICAGO (AP) — Fitch Ratings said Monday that it expects losses from Hurricane Isaac to be significant but "manageable" for insurance companies in the U.S. and the international reinsurance industry.
The rating agency noted in a report that estimates of property losses from Isaac range from $500 million to $2 billion. The slow-moving storm, which made landfall on Aug. 28, brought more than two days of heavy wind and flooding to Louisiana and Mississippi. Thousands of flood insurance claims are being filed.
Homeowners' insurance policies generally don't cover losses from flooding, though many commercial policies do.
If losses from Isaac come in within the expected range, primary insurers will bear most of the loss, as opposed to reinsurance companies, Fitch said. Reinsurance companies, most of which are based outside the U.S., sell insurance to primary insurers to spread risk. The chances of reinsurance companies having to absorb losses increases as the toll of actual hurricane losses rises.
The insurance industry as a whole entered the hurricane season with strong capital positions, making it unlikely that many companies will need to raise significant amounts of capital to compensate for the impact of Isaac, the Fitch report says.
Fitch says it doesn't expect to take any significant rating actions on insurers with regard to losses from Isaac. The hurricane isn't likely to affect rates in the insurance market, the agency says.
The most active companies in personal property and casualty insurance in Louisiana, with Fitch's estimate of their losses in that business, include State Farm, $260 million; Allstate Corp., $118 million; Liberty Mutual, $60 million; Louisiana Farm Bureau Mutual, $53 million; and ARX Holding, $38 million, according to the report. For commercial insurance, the most active include Louisiana Citizens Property Insurance Co., $56 million; State Farm, $40 million; CNA Insurance, $38 million; Zurich Insurance Group AG, $37 million; and Liberty Mutual, $33 million.