NU Online News Service, Sept. 12, 11:45 a.m.EDT
|As wildfires continue to flare throughout Texas consuming morehomes and creating more losses for insurers, Moody'sRating Service says the blazes will have a negative impact oninsurer's third quarter results when combined with other lossesthey've experienced during the third quarter.
|Moody's says even if the losses were three times more than the1,600 homes Texas officials say are confirmed lost to fires, thelosses are “small compared with the U.S. property and casualtyindustry's earnings capacity and capital base.”
|Last week, the Insurance Council of Texas says it expects losses from the wildfires to exceed $100 million, whichdoes put it close to, but not into the top 10 catastrophic U.S.wildfires.
|Moody's says, “the Texas wildfires will not be a major capitalor credit event for the P&C industry. However, losses from thewildfires will pressure 2011 earnings, which have already weakenedby high winter—spring storm and tornado losses during the firsthalf of the year and Hurricane Irene in the third quarter.”
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Insurers cannot expect much help from reinsurers, Moody'snotes, because catastrophic retentions are designed to “providerisk transfer for larger severity events such as hurricanes andearthquakes.”
The worst of the fires in the state, Bastrop County, is now 60percent contained, says the Texas Forest Service, with a total of 1,554homes destroyed by the blaze. With an additional 87 homes lost infires in other parts of the state, the total now stands at 1,641homes.
|Another 50 homes are threatened in other parts of the state, theService says.
|In the past seven days the Texas Forest Service says it hasresponded to 141 fires consuming 34,933 acres, with 19 new firesyesterday.
|The Service says that 95 percent of the state is “in extremedrought, with 81 percent in exceptional drought.” The drought isexpected to worsen through this year.
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