Hurricane Dorian, the storm currently devastating the Bahamas, will cause at least $25 billion of losses for insurers, according to analysts at UBS Group AG, a figure that would make it the most expensive natural disaster for the industry since 2017.
Dorian could inflict losses of as much as $40 billion, depending on whether the storm hits the eastern coast of Florida in the next few days, the analysts said in a note. The hurricane is already the most powerful storm to make landfall in the Atlantic since the 1935 Labor Day hurricane, according to the National Weather Service.
The last natural disaster to cause more than $25 billion of insured damages was Hurricane Maria two years ago, according to Munich Re, which compiles a database of the biggest losses. The insurance industry has benefited from relatively few major disasters since Maria, allowing the world's biggest reinsurers—which carry much of the risk from a hurricane—to maintain excess capital of $30 billion, according to UBS.
The bank estimated that the likely losses from Dorian would erode that capital, potentially causing the reinsurers to change their prices. The hurricane has brought maximum sustained wind speeds of 185 miles per hour, according to the National Hurricane Center.
© Copyright 2022 Bloomberg News. All rights reserved.