NEW YORK — Fitch Ratings says it anticipates losses related to Isaac will be largely borne by primary insurers, but estimates remain uncertain.
Fitch wrote: “Though Isaac carries significant threat, new flood control systems built post-Katrina are expected to limit the surge from Isaac in the New Orleans region.
“Catastrophe modeler AIR Worldwide reported an initial estimate of industry insured losses of $300 million to $7.5 billion, which would make up a modest 1 percent or less of U.S. industry statutory capital. At the high end of the range, Isaac could be on par with 2004’s Hurricane Ivan ($8.1 billion), 1989’s Hurricane Hugo ($6.7 billion) or slightly more than half of the losses of Hurricane Ike ($12.7 billion). However, loss estimates remain highly uncertain.
“We expect the brunt of losses to be borne by primary writers, including State Farm, Allstate, Alfa Mutual (primarily concentrated in Alabama) and Liberty Mutual Group, based on market share positions in Louisiana, Mississippi, and Alabama. Market share was calculated based on direct written premiums and gives no consideration for reinsurance. The likelihood of losses being allocated to the reinsurance industry increases if losses come in at the higher end of AIR’s range.”