US - US Insurers Brace for Another 'Above Average' Hurricane Season

Fitch Ratings-Chicago-01 June 2021: After a record-breaking hurricane season in 2020, U.S. property/casualty (re)insurers are bracing to absorb large potential catastrophe losses with projections for another above-average hurricane season, according to a new Fitch Ratings report.

Fitch Ratings-Chicago-01 June 2021: After a record-breaking hurricane season in 2020, U.S. property/casualty (re)insurers are bracing to absorb large potential catastrophe losses with projections for another above-average hurricane season, according to a new Fitch Ratings report.

After weathering the global pandemic last year, P/C insurers and global reinsurers are largely well capitalized and positioned to withstand a significant hurricane event in 2021. Fitch has a Stable Rating Outlook for the P/C and global reinsurance sectors.

Natural catastrophes, and particularly hurricanes, are a prime source of underwriting volatility for the P/C industry. Six hurricanes made landfall on the U.S. Atlantic or Gulf Coast in 2020 (the highest number in over 15 years), and that number could reach double digits this season.

“Recent active hurricane seasons have generated an accumulation of insured losses that have led to substantially higher premiums for coastal property insurance,” said Director Christopher Grimes. “Better pricing is attracting additional capital, including a recent influx of hurricane-exposed catastrophe bonds that helps absorb losses and maintain availability of coverage.”

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