Katrina is now officially the most expensive insured event in US history. The latest figures put insured claims to date at $34.4 billion, significantly higher than the costs associated with other hurricanes or the 9/11 attacks. Adding Rita’s projected expense brings the total for the season to date to about $70 billion.
And this is just the insured losses on claims filed to date. Estimates of future claims from Katrina push the total amount to between $40 and $55 billion.
This was shaping up to be a nicely profitable year for the industry; those profits have disappeared under the waters of these disasters. Pessimists will note that the hurricane season still has some months to run; insurance executives are keeping fingers crossed in hopes that another storm does not make landfall this year.
What does this mean for you?
Costs for all lines of insurance will increase for all renewals in coming months, with the sharpest increases in property and homeowners, especially in hurricane-prone areas and coastal regions.
Reinsurers will get mighty picky about the underwriting underlying their primary insurers; expect to see more limitations and exclusions.
Oct
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