Best’s Commentary: Hurricane Fiona-Related Insured Losses Depend on Recovery and Resilience

AM Best expects insured losses from Hurricane Fiona in the countries hit hardest to datePuerto Rico and the Dominican Republicto be influenced by the duration of business interruptions due to power losses, but ultimately manageable for affected carriers.

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Business Wire, Inc.Business Wire, Inc.
Retrieved on: 
Wednesday, September 21, 2022
Information
Tags: 
Insurance, Professional Services, Risk, Hurricane Maria, Dominican, News, Pacific typhoon season, Industry, AM Best, Electricity, National Flood Insurance Program, Insurance, Dominican Republic, ALL, Reinsurance
Geotags: 
NEW JERSEY, EUROPE, UNITED STATES, NORTH AMERICA, LONDON, PUERTO RICO, SINGAPORE
Summary
Key Points: 
  • AM Best expects insured losses from Hurricane Fiona in the countries hit hardest to datePuerto Rico and the Dominican Republicto be influenced by the duration of business interruptions due to power losses, but ultimately manageable for affected carriers.
  • According to the Bests Commentary, Hurricane Fiona Insured Losses Depend on Recovery and Resilience, the top 10 insurers in Puerto Rico account for more than 90% of the market share for the auto, fire and allied lines, homeowners/farmowners and commercial multi-peril (property) lines.
  • It could take some time for claims adjusters in Puerto Rico to assess and estimate damages, said David Blades, associate director, industry research and analytics.
  • Furthermore, most losses will be flood-related and not covered by a standard homeowner policy.


AM Best expects insured losses from Hurricane Fiona in the countries hit hardest to date—Puerto Rico and the Dominican Republic—to be influenced by the duration of business interruptions due to power losses, but ultimately manageable for affected carriers.

According to the Best’s Commentary, “Hurricane Fiona Insured Losses Depend on Recovery and Resilience,” the top 10 insurers in Puerto Rico account for more than 90% of the market share for the auto, fire and allied lines, homeowners/farmowners and commercial multi-peril (property) lines. Two of these groups are extremely well-diversified, multinational insurers, but six of those top 10 companies are insurers with 100% of their exposure concentrated in Puerto Rico, representing approximately 43% of the market share for the aforementioned lines of coverage most at risk for sizable claim activity.

“It could take some time for claims adjusters in Puerto Rico to assess and estimate damages,” said David Blades, associate director, industry research and analytics. “However, since Hurricane Maria in 2017, insurance companies on the island have taken significant action to manage their risk profiles better by tightening underwriting guidelines, sharpening risk management techniques, improving pricing and getting significant rate increases. Furthermore, most losses will be flood-related and not covered by a standard homeowner policy. Those losses would fall under the National Flood Insurance Program.”

The Dominican Republic experienced widespread flooding and property damage, with popular tourist destinations left without electricity. However, a large part of the insurance portfolio is concentrated near Santo Domingo, the country’s capital, with less distribution in the regions where a greater impact from the hurricane is expected.

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=324224.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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