US Markets

Hurricane Dorian could cost insurers $25 bln- UBS

Credit: REUTERS/NASA

Hurricane Dorian, which battered the Bahamas early on Monday, could cause insurance industry losses of up to $25 billion, according to analysts at UBS.

Widens distribution with no change to text

Sept 2 (Reuters) - Hurricane Dorian, which battered the Bahamas early on Monday, could cause insurance industry losses of up to $25 billion, according to analysts at UBS.

Dorian, the second-strongest Atlantic storm on record, was forecast to pound the archipelago through the day, then move slowly towards the east U.S. coast, where authorities ordered more than a million people evacuated in Florida, South Carolina and Georgia.

UBS analysts updated their model to reflect a wider potential industry insured loss range of $5 billion to $40 billion and raised their base case to $25 billion from $15 billion, with solvency capital at risk.

The analysts estimate about $70 billion of natural catastrophe losses for 2019 and added this could erode excess capital and raise prices.

Insurers faced record bills from hurricanes, earthquakes and wildfires of over $135 billion in 2017 and got some relief in 2018.

UBS named Swiss Re SRENH.S as its least preferred stock and said its second buy-back was unlikely, with Lancashire LRE.L, Beazley BEZG.L and SCOR SCOR.PA set to gain most from an uptick in prices.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Carolyn Cohn)

((noor.hussain@thomsonreuters.com; Within UK +44 20 7542 1810; Outside UK +91 80 6182 2663 or +91 80 3796 2663 ;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Latest Markets Videos

Reuters

Reuters, the news and media division of Thomson Reuters, is the world’s largest international multimedia news provider reaching more than one billion people every day. Reuters provides trusted business, financial, national, and international news to professionals via Thomson Reuters desktops, the world's media organizations, and directly to consumers at Reuters.com and via Reuters TV.

Learn More