US property and casualty insurers' shares slump as hurricane season losses mount
Property and casualty insurance stocks slump on Hurricane Milton-related fears
Another catastrophe adds to insurers' Florida woes
Analysts say the full extent of hurricane season damage still unknown
Adds Generac's stock performance in paragraph 14; Updates prices throughout
By Manya Saini
Oct 7 (Reuters) -U.S. property and casualty insurance stocks tanked on Monday after Hurricane Milton intensified into a category 4 storm on its path towards Florida's western coast, marking yet another costly disaster for the industry to cover this year.
Insurers are expected to face catastrophe-related claims for billions of dollars from a devastating hurricane season. Catastrophe losses refer to a significant financial hit that insurance companies incur due to large-scale natural or man-made disasters.
These events have intensified over the past few years and have significantly hurt profits due to substantial payouts tied to widespread property damage, business interruptions and liability claims.
The U.S. has grappled with multiple major hurricanes in 2024, including Hurricane Debby striking Florida in August, Hurricane Francine which made landfall in Louisiana in September, and more recently Hurricane Helene that hit Florida in the same month.
The S&P Insurance Select Industry .SPSIINS index was last down 3.1% on Monday.
MOUNTING LOSSES
Severe and frequent natural disasters have exacerbated the industry's retreat from high-risk areas, particularly Florida. The costs of reinsurance have also risen sharply in the state, making it more expensive for insurers to operate.
"Investors are not only thinking about the short-term hit to earnings but also the long-term affect weather change and a seasonal uptick in damage will do to the business," said Michael Ashley Schulman, partner and CIO at Running Point Capital Advisors.
"Their credit ratings have been largely unaffected in the short term; however, if extreme weather drives people away, their long-term revenue models may be affected," Schulman said.
On Monday, Florida was preparing for the largest evacuation since 2017 as Milton intensified in the Gulf of Mexico on its path toward its western coast, coming on the heels of the devastating Hurricane Helene. It had the potential to affect areas already wrecked by Helene.
Heritage Insurance HRTG.N, which has a big footprint in the state, was last down 25%. Universal Insurance UVE.N and HCI Group HCI.N fell 18% and 17%, respectively.
Sector bellwether Travelers Companies TRV.N was last down 4%, while Allstate ALL.N and Assurant AIZ.N declined 5% and 4.4%, respectively.
Meanwhile, Generac GNRC.N, which makes generators that power homes during an outage, surged more than 8% on Monday as investors bet on increased demand arising from the hurricane-related disruptions.
Insurance broker Aon said in a report late on Sunday there was an increasing risk of life-threatening storm surge and damaging winds for portions of the west coast of the Florida Peninsula beginning Tuesday night or early Wednesday.
The U.S. hurricane season is expected to end on Nov. 30. Forecasts have pointed to an above-normal activity this year due to unusually warm sea surface temperatures in the tropical Atlantic, coupled with La Nina weather patterns.
"The insurance industry must be prepared for the possibility of a challenging second half of the year," broker Gallagher Re said in a July report.
"These conditions, in tandem with the influence of climate change, have aided in more unpredictable and extreme events in 2024."
Where Hurricane Milton is expected to hit https://reut.rs/3Yd4Azi
Reporting by Manya Saini in Bengaluru; Additional reporting by Lance Tupper in New York; Editing by Vijay Kishore and Krishna Chandra Eluri
الأصول ذات الصلة
آخر الأخبار
إخلاء المسؤولية: تتيح كيانات XM Group خدمة تنفيذية فقط والدخول إلى منصة تداولنا عبر الإنترنت، مما يسمح للشخص بمشاهدة و/أو استخدام المحتوى المتاح على موقع الويب أو عن طريقه، وهذا المحتوى لا يراد به التغيير أو التوسع عن ذلك. يخضع هذا الدخول والاستخدام دائماً لما يلي: (1) الشروط والأحكام؛ (2) تحذيرات المخاطر؛ (3) إخلاء المسؤولية الكامل. لذلك يُقدم هذا المحتوى على أنه ليس أكثر من معلومات عامة. تحديداً، يرجى الانتباه إلى أن المحتوى المتاح على منصة تداولنا عبر الإنترنت ليس طلباً أو عرضاً لدخول أي معاملات في الأسواق المالية. التداول في أي سوق مالي به مخاطرة عالية برأس مالك.
جميع المواد المنشورة على منصة تداولنا مخصصة للأغراض التعليمية/المعلوماتية فقط ولا تحتوي - ولا ينبغي اعتبار أنها تحتوي - على نصائح أو توصيات مالية أو ضريبية أو تجارية، أو سجلاً لأسعار تداولنا، أو عرضاً أو طلباً لأي معاملة في أي صكوك مالية أو عروض ترويجية مالية لا داعي لها.
أي محتوى تابع للغير بالإضافة إلى المحتوى الذي أعدته XM، مثل الآراء، والأخبار، والأبحاث، والتحليلات والأسعار وغيرها من المعلومات أو روابط مواقع تابعة للغير وواردة في هذا الموقع تُقدم لك "كما هي"، كتعليق عام على السوق ولا تعتبر نصيحة استثمارية. يجب ألا يُفسر أي محتوى على أنه بحث استثماري، وأن تلاحظ وتقبل أن المحتوى غير مُعدٍ وفقاً للمتطلبات القانونية المصممة لتعزيز استقلالية البحث الاستثماري، وبالتالي، فهو بمثابة تواصل تسويقي بموجب القوانين واللوائح ذات الصلة. فضلاً تأكد من أنك قد قرأت وفهمت الإخطار بالبحوث الاستثمارية غير المستقلة والتحذير من مخاطر المعلومات السابقة، والذي يمكنك الاطلاع عليه هنا.
