Tags: irene | insurer | moodys

Moody's: Irene Claims May Surprise Insurers

Wednesday, 31 Aug 2011 07:06 PM

U.S. property insurers, a group led by State Farm Mutual Automobile Insurance Co. and Allstate Corp., may face Hurricane Irene claims “surprises” from power failures and flooding, Moody’s Investors Service said.

“Some surprises may be in store,” Paul Bauer, a vice president at Moody’s, said Wednesday in a report. “High levels of inland flooding, extensive power outages, and the very wide dispersion of the storm combine to create a high degree of uncertainty in terms of early loss estimates.”

Insurers are gathering claims from North Carolina to Maine as drivers, homeowners and businesses add up their losses. State Farm, based in Bloomington, Illinois, reported home and car claims tripled to more than 50,000 from a total Tuesday of about 17,000. Kinetic Analysis Corp., a firm that predicts the effects of disasters, estimated industry losses at $4.9 billion. That’s up from an earlier estimate by Kinetic of $2.6 billion.

“Extensive power outages will add to homeowners losses,” Bauer said. “The most common is spoiled food, which is a very low-cost claim. However, sump-pump failures due to loss of power can lead to more expensive water damage.”

Flooding will add to insurer claims on coverage of autos and businesses, Moody’s said. Landslides and business interruption may trigger demands, and insurers may also face claims to reimburse evacuees for expenses, Moody’s said.

“Losses from Irene will pressure earnings,” Bauer said. “Hurricane Irene will not be a major capital or credit event.”

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U.S. property insurers, a group led by State Farm Mutual Automobile Insurance Co. and Allstate Corp., may face Hurricane Irene claims surprises from power failures and flooding, Moody s Investors Service said. Some surprises may be in store, Paul Bauer, a vice...
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2011-06-31
Wednesday, 31 Aug 2011 07:06 PM
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