After hurricane Ian, MarketScout’s CEO Richard Kerr said that he expects the storm loss event will have “significant” implications for property rates in Florida and other wind-exposed states of the US.
Analysing commercial insurance market rates during the third-quarter of 2022, MarketScout said that property rates in coastal areas are now expected to rise after hurricane Ian.
In the third-quarter of 2022, commercial property was already the fastest rising area of P&C insurance rates, according to MarketScout.
Commercial property rates rose by 7.67% in Q3 2022, while overall MarketScout’s commercial lines composite rose by 5.28%.
But hurricane Ian is set to stimulate a faster pace of insurance rate increases it now seems.
This will be triggered by loss hit carriers looking to recover earnings, but also by an elevated level of risk awareness among those writing coastal property risks, as another really major loss event reverberates through the system.
In addition, higher reinsurance costs are also a given, which will trickle down and increase the pressure for primary property insurance rates to increase as well.
Ever since Ian hit Florida, sources have been asking whether coastal areas of that state are becoming uninsurable, at least for older stock properties and anything that hasn’t been hurricane-hardened.
This is going to be reflected in renewal prices, it seems, at the primary homeowner and commercial insurance level.
“Losses from Hurricane Ian will significantly impact rates in Florida and other wind exposed coastal states,” Kerr explained on commercial rates.
Moving onto homeowners insurance rates in the United States, homes at a value of under $1m saw rates rise 4% in Q3 2022, while higher value homes of over $1m saw their insurance rates rise by 6%.
“High value homes are experiencing more aggressive rate increases,” noted Kerr. “This is largely because, on a composite national basis, more high value homes are located in catastrophe prone areas of the US which naturally are assessed higher rates.”
Turning back to the recent catastrophe, Kerr said on homeowners business, “Hurricane Ian is going to be a huge loss for insurers covering properties in Florida. Excluding coverage for flood and storm surge, estimates are from $25 to $45 billion. Including flood claims, the total will most likely surpass $100 billion.
“Rates will be up dramatically in Florida for the foreseeable future.”
Coastal property & Florida rates to rise dramatically after Ian: MarketScout’s Kerr was published by: www.Artemis.bm
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