- Title: Hurricane Matthew could cost $25-30 bln - industry estimates
- Date: 7th October 2016
- Summary: CAPE CANAVERAL, FLORIDA, UNITED STATES (OCTOBER 7, 2016) (REUTERS) PAN OF WATER LAPPING DAMAGED DOCK AND PIER
- Embargoed: 22nd October 2016 19:25
- Keywords: Hurricane Matthew storm insurance National Hurricane Center losses estimates Laura Adams insuranceQuotes
- Location: CAPE CANAVERAL, FLORIDA; AUSTIN, TEXAS; ATLANTA, GEORGIA, UNITED STATES
- City: CAPE CANAVERAL, FLORIDA; AUSTIN, TEXAS; ATLANTA, GEORGIA, UNITED STATES
- Country: USA
- Topics: Company News Markets,Economic Events
- Reuters ID: LVA003530CCY5
- Aspect Ratio: 16:9
- Story Text: Hurricane Matthew lashed Florida on Friday (October 6) in an assault that could cause insurance losses of $25-30 billion, according to initial industry estimates.
Data modeling firm RMS has told clients there was a 42 percent chance of a $20 billion loss, a source familiar with the research said, and a 26 percent chance of a $30 billion loss from the hurricane.
Another firm, Kinetic Analysis, initially said insured losses of $25 billion would make Matthew "the second most costly hurricane in U.S. history behind Katrina." Later, the firm changed the estimate to "considerably lower", without giving further detail.
"It's possible that the hurricane could do the kind of damage that Katrina did," said Laura Adams, senior insurance analyst at InsuranceQuotes. "It really does depend on what level of wind comes on shore. And we've seen, you know, what's happened so far in Florida, a lot of the states above Florida, we will have to see what the damage is there."
Adams said the initial cost to insurers would affect consumers' bottom line as well.
"They do certainly cost insurers a lot of money, but it also influences what the future rates will be. So anytime we have a natural disaster that's going to influence what consumers pay in the future, because these companies are going to have to sort of readjust their models and how they price," she told Reuters.
As Hurricane Matthew worked its way up Florida's Atlantic coast, it caused disruptions to air travel, manufacturing, supply chains and retail stores. Some, like Home Depot, activated hurricane command centers to stock their stores with emergency supplies. The storm also caused railroads to suspend or curtail operations. Manufacturers were also affected.
Hurricane Matthew is a "real test" of reinsurers' exposure, S&P Global said in a report. Another rating agency, Fitch, said reinsurers would bear most of the costs, which it estimated at more than $10 billion.
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