Hurricane Ian is one of the most severe tropical cyclones recorded to make landfall in Florida. In addition to loss of life, the economic loss is likely to rise above the previous Florida record of $50 billion caused by Hurricane Irma in 2017.
Providing insurance on Florida property is a risky proposition because of reoccurring hurricane-related losses year after year. Increased concerns about the consequences of climate change are contributing to rising insurance and reinsurance premiums, which DBRS Morningstar expects to continue for the foreseeable future.
DBRS has been crunching numbers and the key highlights include the following:
— Record damage is expected in Florida following the passage of Hurricane Ian. Economic losses are likely to rise above $50 billion, of which $25 billion to $40 billion could be insured losses.
— Four out of the past five years have seen some of the worst cases of Atlantic tropical storm losses in history.
— As providing property insurance coverage in Florida is a challenge, insurers must be selective with the risks that they choose to insure and make appropriate use of diversification and reinsurance.
See the report here.