Hurricane Irene Delivers Punch but Doesn’t Knock Down Specialty Market

NU Online News Service, Sept. 1, 12:57 p.m. EST

Hurricane Irene will be a “body-blow” to the specialty market but the claims it generates is “nothing major compared to available capital,” says David Pagoumian, president of Napco.

“I know my phone has been burning up with calls [with] claims coming in. Adjusters are out there,” Pagoumian says from his Iselin, N.J.-based firm that specializes in property-catastrophe insurance coverage. “But there does not seem to be any horror stories. My feeling is that everyone will lick their wounds and move on.”

Of note, Pagoumian reports some flooding of commercial buildings—mainly strip malls within or on the borders of flooded residential areas.

Like the overall insurance industry, losses that nonadmitted insurers suffer from Hurricane Irene are not expected to turn the market, Pagoumian says.

However, new versions of hurricane models and the possible impact of another storm—such as Hurricane Katia—could produce an uptick in rates at the Jan. 1 treaty renewals, adds Pagoumian.  

Modelers AIR Worldwide and Eqecat have different takes on insured losses caused by Hurricane Irene, which struck the North Carolina coast as a Category 1 storm before moving north up the East Coast to Canada.

AIR says $3 billion to $6 billion in insured losses are expected.

Eqecat establishes a range of expected insured losses between $1.5 billion and $2.8 billion.