Insurers ‘strong enough to cover Hurricane Matthew bill’
US insurers can absorb costs arising from Hurricane Matthew, which is causing considerable flooding in the US coastal state of North Carolina as it heads back into the Atlantic.
The hurricane has now been downgraded to a “post-tropical cyclone” and late this morning was centred about 380km east of North Carolina, moving east and expected to peter out in the next 48 hours.
Matthew has caused extensive flooding in North Carolina. Some 3000 people are still in public shelters and an estimated 700,000 people have no electricity.
The Insurance Information Institute says the industry had about $US680.6 billion ($896.2 billion) in cumulative policyholders’ surplus at June 30 – a record high.
“The insurance industry has the financial strength to pay claims caused by Hurricane Matthew.”
Various US media reports suggest insured property losses – both commercial and residential – will be up to $US6 billion ($7.9 billion).
In comparison, Superstorm Sandy in 2012 caused insurer property losses of up to $US20 billion ($26.3 billion) and the bill for Hurricane Katrina in 2005 was up to $US40 billion ($52.6 billion).
The US was spared the brunt of Matthew, which lost much of its power after crossing the Caribbean and heading towards southeastern US states including North Carolina.
Haiti was the worst-hit. The hurricane lashed the impoverished Caribbean nation’s southern coast, tearing down houses and killing at least 800 people.
Insured losses in Haiti will probably be negligible given the low level of coverage, which is typical of less developed economies.