(Bloomberg) -- Tropical Storm Hermine, which is poised toland in Florida Friday, may result in “manageable” losses for theinsurance industry, according to Keefe Bruyette & Woods analyst Meyer Shields.
|The storm is forecast to hit northwest Florida, a region of thestate with lower insured property value, Shields wrote in anote to clients Thursday.
|Potential losses would be greater if the storm were to strikemore-populated areas of the state, he said.
|'Easily absorb a $15B catastrophe loss'
“We think the insurance industry can easily absorb a $15 billioncatastrophe loss without generating a negative quarterly return,”Shields said in the note. “Given the preliminary expected losspotential for Hermine and its path trajectory, we don’t anticipatethe storm to materially affect pricing trends.”
Hermine’s winds could reach 75 miles (121 kilometers) per hour,just over hurricane-strength, making it the first such storm to hitFlorida since Wilma in 2005, according to the U.S. NationalHurricane Center. Surge from the storm could be an issue forcommercial insurers in the region, Shields said.
|Property coverage writers
Citizens Property Insurance Corp., the government-owned insurer oflast resort, along with Universal Insurance Holdings Inc. and TowerHill Group are the biggest writers of property coverage in Florida,Shields said.
State Farm Mutual Automobile Insurance Co., Allstate Corp. andNationwide Mutual Insurance Co. are the largest in the U.S.Southeast.
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|12 ways the U.S. is using nature to protectagainst natural disasters
|Rising sea levels could cost U.S.homeowners close to $1 trillion
|Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.
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