Thursday, August 27, 2020

Insurers Most Exposed To Hurricane Laura (ALL, TRV, PGR, HIG)

From Artemis, August 27:

Hurricane Laura exposed insurers could tap reinsurance (ALL, TRV, PGR, HIG)
A number of the major property and casualty insurers that are seen as most exposed to hurricane Laura’s impacts on the Gulf Coast region could tap into their reinsurance programs, should the major hurricane prove particularly impactful.

Analysts from Morgan Stanley explained that Allstate, Travelers, Progressive and The Hartford are all insurers that should be watched closely, given they have a relatively high concentration of exposure in the region where hurricane Laura made landfall earlier today with 150 mph Category 4 winds.

Allstate has a total property insurance market share of ~11.3% in Texas and Louisiana combined, the analysts explained, adding that this adds up to ~5% of the carriers annual premiums.
Allstate is estimated to have suffered roughly $864 million of losses from 2005’s hurricane Rita, which is perhaps the closest analogue to Laura, and $966 million for hurricane Ike, which was more of a Texas storm.

Allstate has a robust reinsurance program of both per-occurrence and aggregate towers.
The insurers per-occurrence catastrophe reinsurance attaches above $500 million of losses, so based on the above loss estimates for previous storms, this seems highly likely to get tapped into.
Allstate’s catastrophe aggregate meanwhile has a high retention but the analysts point out the company has already eaten roughly $1.3 billion through the retention beneath it.

At this stage though it seems more likely Allstate could eat into its per-occurrence reinsurance layers, some of which may be backed by collateralized underwriters such as ILS funds.

Travelers meanwhile, has combined Texas and Louisiana market shares in homeowners and commercial property of ~4.0% and ~7.2%, respectively, the Morgan Stanley analyst team said....

Also at Artemis, August 26:
Hurricane Laura analogues cited at up to $6bn insured loss by RMS