2022 hurricane season

Another data point for those looking at the implications of major hurricane Ian’s path through Florida, rating agency Fitch says the insurance and reinsurance market loss is likely up to $40 billion.

Coming on the heels of five heavy catastrophe loss years, major hurricane Ian’s impacts in Florida and the resulting insurance, reinsurance and ILS market loss, could trigger a wholesale reevaluation of the provision of catastrophe insurance protection, according to Michael Millette.

Hurricane Ian’s impact is likely to cause losses to some Florida focused indemnity catastrophe bonds, as well as to some of the NFIP’s FloodSmart Re cat bond series, according to investment manager Twelve Capital.

Major hurricane Ian is estimated to have caused an insurance and reinsurance industry loss of between $28 billion and $47 billion just from wind and storm surge damage in Florida, according to CoreLogic.

While the insurance, reinsurance and insurance-linked securities (ILS) industry works to understand its exposure to hurricane Ian’s major landfall event in Florida, the storm has now crossed that state, emerged back into the Atlantic and is forecast to make a second hurricane force landfall in South Carolina tomorrow.

The economic loss from major hurricane Ian’s impacts in Florida has been initially estimated at around $65 billion by global GIS and geospatial technology company RMSI.

Some further insight on the potential quantum of industry loss faced by the insurance, reinsurance and ILS market from major hurricane Ian, as KBW analyst Meyer Shields said he believes the relatively rapid weakening of the storm after landfall could mean losses settle closer to the bottom of a $32.5 billion to $40 billion range.

According to sources of and data seen by Artemis, last night catastrophe risk modelling specialists had been hinting at major hurricane Ian having the potential to deliver a global insurance, reinsurance and ILS market loss of more than $50 billion, in updates sent to their clients.

In the wake of hurricane Ian, it’s going to be particularly challenging to have an accurate view of catastrophe bond market impacts in the short-term, which we’re being told could result in a particularly far-reaching mark-down of cat bond names on brokers’ secondary pricing sheets this Friday.

While too early for accurate loss estimates, analysts at KBW have said that they expect hurricane Ian’s catastrophic impacts will provide further fuel under property catastrophe reinsurance rate momentum, while also further disrupting the Florida insurance marketplace.