The series of hurricanes in the US and the Caribbean comes at the expense of the US insurance giant AIG. The company recently declared that it expects to record loss in the range of $2.9 to $3.1 billion before taxes.
According to industry estimates, insurers and reinsurers are expected to have up to $100 billion in damages by “Harvey”, “Irma” and “Maria.” And all this happened within few weeks.
After tax, AIG will have around two billion dollars. The leading property insurer Chubb had previously estimated its costs for the hurricane series up to $1.28 billion after taxes. Lloyd’s expects up to 4.5 billion dollars – only from “Harvey” and “Irma”. However, the costs are distributed among numerous players active in the market.
In particular, Harvey was a real pain for AIG: overall, the first hurricane that hit the US this year led to a loss of around $1.2 billion. Hurricane Harvey led huge wind and water damage in the states of Texas, Louisiana and, to a lesser extent, Kentucky and Tennessee at the end of August. Parts of the Texan city of Houston were underwater for days. Some 7,000 homes were destroyed and 37,000 homes were heavily damaged by the storm. Credit agency Moody’s calculated that Harvey was the most expensive storm in the history of the United States.
In case of Hurricane Irma, which hit the Caribbean islands, the cost of AIG is also around $1 billion. Irma directed primarily to the US mainland in Florida.
The cost of Hurricane Maria, which caused winds of 250 kilometers per hour on the American territory of Puerto Rico, for AIG is at about 600-700 million dollars. In addition, the insurer had to pay about 150 million in other natural disasters, including earthquake damage in Mexico.
Munich Re, a major German reinsurer of natural disasters, already announced a profit warning in mid-September. While Hurricane Irma had just sunk to tropical storm, Munich Re announced that it would not achieve its $2 to 2.4 billion profit target for 2017. For the third quarter an unknown loss is forecast.