Home » NEWS » Insurers wary of upcoming hurricane season

Insurers wary of upcoming hurricane season

OLDWICK, N.J. — After significant catastrophe losses in first quarter 2010, U.S. property/casualty insurers and global reinsurers are hoping their balance sheets do not face further financial risks, even as conditions appear ripe for the upcoming hurricane season to be potentially as active as 2005, according to A.M. Best Co.

The industry enters the season on the strength of underwriting and financial results that rebounded in 2009 after deteriorating in 2008, a year marked by catastrophe losses from hurricanes Ike and Gustav and poor investment returns associated with the global financial turmoil.

Three forecasters predict four intense hurricanes in the Atlantic Basin, well above the long-term average of two to three intense storms. Warmer sea surface temperatures and a transition to neutral El Niño conditions are expected to enhance hurricane activity.

State wind and beach plans and last-resort insurers saw in-force liabilities grow by double and even triple-digit percentages from 2005 to 2009 in states such as North Carolina, Florida and Texas.

Though still major writers of homeowners’ multi-peril, Citizens Property Insurance Corporation in Florida and Louisiana Citizens Property Insurance Corp. have shifted market share to other carriers through takeout programs.

Oldwick, N.J.-based A.M. Best Co. data show insurers’ pullback from hurricane prone states accelerated in the 2005-2009 period compared with homeowners’ multi-peril business written earlier in the decade.

The top 10 A.M. Best rated writers’ market share fell more than eight percentage points from 2005-2009 in Louisiana; about three percentage points in Mississippi; and more than nine percentage points in Texas.


… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Wally Northway

Leave a Reply

Your email address will not be published. Required fields are marked *