NEW YORK--(BUSINESS WIRE)--KBRA releases research discussing the financial impact to Florida-based insurance companies as the end of the 2024 hurricane season enters its final month. KBRA notes the uptick in storm activity as several weather systems made landfall in the southeastern United States.
Florida and several other states in the region were impacted by significant wind and flood damage from Hurricanes Helene and Milton. While the full economic cost of these latest storms is still under evaluation, current indications across KBRA’s rated universe of Florida homeowners’ insurers suggest the overall financial impact is manageable. However, the damage profile of these hurricanes, particularly Helene as well as Beryl, Debby, and Francine earlier this year, is a stark reminder of the persistent protection gap for flood coverage.
Key Takeaways
While two major hurricanes hit Floridian shores within a two-week period, preliminary gross and net loss estimates for homeowners’ carriers indicate that full-year (FY) earnings will be significantly reduced but are expected to remain positive, with no appreciable erosion in capital and continued near-term ratings stability.
Increased reinsurance purchases by the primary carriers for the 2024 storm season provided sufficient balance sheet protection. Some insurers anticipate Hurricane Helene to be a full-retention event while others anticipate limited insured losses. Most insurers expect Hurricane Milton will be a full-retention event.
The large delta between reported estimates of total economic losses and total insured losses (due to standard flood exclusions in typical homeowner’s policies) highlighted the low level of insurance penetration for flood coverage.
Click here to view the report.
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KBRA is a full-service credit rating agency registered in the U.S., the EU, and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.
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