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.
To sign up for Mississippi Business Daily Updates, click here.
FOLLOW THE MBJ ON TWITTERMy Tweets
Top Posts & Pages
- Canadian company purchasing Southern Lumber for nearly $50M
- Winchester lands $50M ammunition contract from Homeland Security
- Lawmakers question education leaders about escalating administrative costs
- Deer processors need to use caution to insure safe, tasty venison
- Peavey Electronics reorganizing under new globalization plan
- Pearl ordering rental properties to retrofit with sprinklers, build storm shelters
- C Spire completes acquisition of MegaGate Broadband
- Columbia Parachute expanding, relocating to BusinessPlex
- Tourism conference being held on Coast; industry to ask state for more money