Thursday, August 30, 2012

"How Much Will Hurricane Isaac Cost Insurers?" (ALL)

The insurers with the largest Gulf exposure are State Farm and Allstate. Alfa also has some market share but they're a mutual, as is State Farm, so no speculative plays.
Chubb, which is so large on the Atlantic coast has very little Gulf share.

From the Wall Street journal's Deal Journal:
Estimates of what Hurricane Isaac will cost the insurance industry are starting to roll in, and early returns show the price tag will be a relatively modest one compared to past storms that have struck the Gulf Coast.

Disaster-modeling company Eqecat told Dow Jones Newswires this morning that property-casualty companies will be on the hook for between $500 million to $1.5 billion in onshore claims costs. Rod Fox, CEO of reinsurance broker TigerRisk Partners, estimated the finally tally with be between $1 billion and $2 billion.

The bulk of the cost will be borne by primary insurers like Allstate Corp ALL -0.56%. and Travelers Cos. instead of the companies those insurers turn to for backup protection, reinsurers like Swiss Re AG SREN.VX -0.17% or Munich Re MUV2.XE -0.81%. Some smaller regional insurers may reach claims levels that allow their reinsurance protection to kick in, Mr. Fox said, but generally speaking, losses for reinsurers will be “minimal.”...MORE