Estimated losses from Hurricane Isaac range from $0.5 billion to $2 billion, numbers that Fitch Ratings says are manageable for primary insurers located in the U.S. and the global reinsurance industry.
“If actual losses from Hurricane Isaac end up within current ranges, primary insurers will bear most of the loss,” said Chris Grimes, associate director at Fitch. As the overall industry entered the hurricane season with a favorable capital position, it is unlikely that many insurers will require significant capital-raising activity to offset losses from Isaac and additional inland storms which emerged earlier in 2012, according to Fitch’s “Hurricane Isaac: Losses Bearable for Insurance Industry” report. “However, as incurred losses rise, the chances of losses being allocated to the reinsurance industry increase,” Grimes said.
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