Insurers Benefiting From A Quiet Hurricane Season
The insurance industry desperately hoped for a quiet hurricane season this year, and thus far their wish has come true. Hard hit from declining underwriting activity and investment losses stemming from the financial crisis, this was a year that they could have done without extensive claims payouts.
By contrast, 2008 was the most expensive year for insurers since the record payouts for Katrina. There were a number of significant storms last year, lead by Hurricane Ike with an estimated $12 billion in payouts, so far this year only one tropical storm has made landfall in U.S. territory.
Coupled with a partial rebound with the stock market, insurers are looking much better than they were at the start of the year when many firms posted losses due to the financial crisis. Most of those firm will likely post profit this quarter as a result of the quiet hurricane season.
While there is still the chance for another land strike this year, it’s starting to get fairly late in the season. Many coastal residents are likely to see premium drops next year as insurers will be hard pressed to get rate hikes by insurance regulators with the lack of storm activity this year.
