Hiscox reveals Hurricane Harvey impact after storm causes widespread damage and flooding in Texas
Lloyd’s insurer Hiscox is expecting a $150m (£110m) claims bill from Hurricane Harvey.
The estimate of Hiscox’s Hurricane Harvey impact is based on a market-wide insured loss of $25bn.
The Lloyd’s insurer had two areas of exposure: through reinsurance protection and insurance lines such as personal and commercial flood cover.
Hiscox said it is confident that the estimated net claims loss is within the group’s modelled range of claims and its reinsurance protections remain intact.
Hiscox chief executive Bronek Masojada stressed the role of insurance in helping “individuals and companies” recover from catastrophic events and stated that Hiscox’s priority will be to pay claims “quickly” to help those affected rebuild.
Masojada appeared confident that, despite 2017 shaping up to be an expensive year for insurance where it comes to natural catastrophes, the industry “can cope”. He looked to the “cyclical” nature of insurance, suggesting that “insurance rates in the affected areas and specific sectors such as large property are likely to increase.”
In terms of the global market for large risks, Masojada’s expectation is that rates will stabilise and increase.
One key issue that Masojada also highlighted was the “lack of flood cover for large parts of the US market” that the Hurricane has exposed.
Hurricane Harvey made landfall in Texas 25 August as a Category 4 storm. It caused an unusually long period of flooding as it passed Houston and was the first major hurricane to make landfall in the US in more than 12 years.
The US has recently been blighted by extreme weather events. Hurricane Harvey was followed by Hurricane Irma, which left a path of destruction over the Caribbean in early September as a Category 5 hurricane. Its 185mph peak sustained wind-speed was one of the strongest ever recorded. It was downgraded to a Category 4 before making landfall in the US in Florida.
Hiscox is expected to announce an estimate of net claims for Hurricane Irma once the impact of the storm has been better assessed.