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A major hurricane in any section of Florida that extends into the Southeast states is likely a “multi-billion-dollar” insurance industry event, according to the broker. -
The storm is now forecast to become a major hurricane by Tuesday night. This morning’s advisory update had estimated that Idalia would reach major hurricane status by early Wednesday.
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The estimate includes privately insured damage to residential, commercial and industrial property, as well as automobiles. Boats, offshore properties and NFIP losses were excluded.
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The broker said economic uncertainty, climate risk and inflation were challenges for the industry.
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Idalia is forecast to become a hurricane later today and a dangerous major hurricane over the northeastern Gulf of Mexico by early Wednesday.
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For insurers, the Golden State is one of the last places they want to face disputes or lawsuits with consumers.
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The reinsurance broker said the losses will fall on the higher end of industry loss ranges.
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Mark to market investment losses and decreased capital allocation in high volatility lines are contributing to an ongoing hard market for reinsurance.
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The broking firm’s (re)insurance market update said growth in alternative capital is a now a permanent feature of the market.
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More than half of the top 20 global reinsurers maintained or reduced their natural catastrophe exposures during the January 2023 renewals.
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The broker said that capital levels should stabilise at previous levels, given a normal second half.
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The estimate is based on the impact to approximately 200 structures where RLI provided primarily homeowners’ insurance.
