Original post: The main concern now is the life and safety and people in its path, but a catastrophic modeling firm on Saturday projected Hurricane Irma’s insured losses in the U.S. alone could reach $50 billion, making it a contender for the most expensive storm on record.
The estimate was based on the forecast track as of early Saturday, though a lot could change in the next 24 to 48 hours.
“As Hurricane Irma moves closer to Florida’s shores, we’re already taking steps and making plans to assist Floridians with post-storm recovery,” Florida Chief Financial Officer Jimmy Patronis said Saturday. “We’re putting search and rescue assets in place, and readying our insurance experts to hit the ground running to help consumers with their post-storm claims. I urge all Floridians to finish their final preparations and prepare for Irma’s imminent landfall.”
For more Palm Beach Post coverage of the estimated impact, read this story.
An early estimate put losses approaching $500 million for the first hurricane to make landfall in Florida in more than a decade, but Hermine was more of a quiz than a full-blown test for insurers and homeowners, as one company executive saw it.
A ratings firm said Hermine’s effects could depress third-quarter earnings for some Florida insurers but the overall effect is “manageable.”
“I would characterize the storm as a good quiz for the catastrophe plans of all companies doing business in Florida,” said Locke Burt, chairman of Security First Insurance Co. in Ormond Beach, one of the state’s five largest insurers. “It wasn’t a large enough storm to be considered a test but it was big enough to learn a few things and, in that sense, it was valuable.”
A full measure of damage and costs is not yet clear, but insurers are starting to get an idea. The largest of 719 claims to Security First so far: $9,300 for a tree that fell on a roof, he said. In part because of hurricane deductibles — the part homeowners pay before insurance kicks in — Burt said Wednesday his company’s payments for Hermine claims could come in under $4 million.
The company has about 300,000 customers statewide. Burt said the company covers about 6 percent of the Tallahassee market, but most of its claims came from The Tampa area, where its market share is closer to 10 percent.
Fitch Ratings said Hermine “is expected to have a modest impact” on insurance companies and the reinsurers who back them up.
Hermine was a Category 1 hurricane when it hit northern Florida Sept. 2, knocking out power in and around Tallahassee and weakening as it crossed Georgia and South Carolina.
Karen Clark & Co. estimated that insured losses from the event will approach $500 million across several states, with economic damage of around $1 billion.
That could “depress third-quarter 2016 earnings for primary writers in Florida and other U.S. southeast states,” according to Fitch. Smaller Florida-based companies now cover about 60 percent of the state’s property market, taking an increasing share from national carriers and state-run Citizens Property Insurance Corp. since the last hurricane, Wilma, hit Florida in 2005.
“Loss experience from Hermine will provide insight into the preparedness of the Florida specialist companies for the next significant storm that hits the state,” Fitch said in a statement.
Many insurers are still assessing damage, including Florida Peninsula Insurance Co. of Boca Raton, CEO Roger Desjadon said Thursday.
“We have emergency response plans in place and the manpower, infrastructure and financial resources to handle these claims,” Desjadon said. “At this point, it is too early to predict Hermine’s impact. We know it could have been much worse.”