Will Irma bust Florida’s insurers?

All that may seem to stand between Florida’s homeowners and potential ruin is one state-owned insurer and dozens of relatively little-known companies. The insurers can tap into the state’s catastrophe fund, but its $17 billion may not be enough.

When the storm is over and the streets are safe again, Floridians will be checking what has become of their homes. They may also want to check on their insurers.

The big national carriers like State Farm and Allstate cut back on writing homeowners’ insurance in Florida years ago, citing catastrophic risks and unhelpful state regulators. Those reductions left a vacuum that the state filled, initially, with a state-owned insurer, Citizens Property Insurance. Eventually, the state offered incentives to coax some brave new insurers into the market.

As a result, all that may seem to stand between Florida’s homeowners and potential ruin is one state-owned insurer and dozens of relatively little-known companies that do all or most of their business in the state. They all have the benefit of the Florida Hurricane Catastrophe Fund, which, with no major storms in the past 12 years, has $17 billion at the ready — a sum that may not be nearly enough.

“This can really be a hurricane that can bust the insurance industry,” said Shahid Hamid, a finance professor at Florida International University’s International Hurricane Research Center. “When I saw Irma’s track, I was tremendously concerned.”

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Whether policyholders can be made whole is likely to depend on reinsurance — the custom-tailored insurance that the Florida insurers themselves take out — and other financial vehicles that they have to fall back on. But the number of variables at play — the exact path of the storm, the companies’ balance sheets and the details of their reinsurance contracts — could produce differing fortunes for the various companies.

Fortunately, some forecasters sharply rolled back their damage estimates, as Irma moved up the Florida Peninsula and lost strength.

“There may yet be a Florida insurance market on Tuesday,” said Charles C. Watson Jr. of Enki Holdings LLC, who had been projecting losses of $172 billion on Sunday morning but just $49 billion by evening.

AIR Worldwide, a catastrophe modeling firm in Boston, predicted Monday that Irma’s insured damage in the United States would cost the industry $20…

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