Citizens, Progressive, Chubb, Allstate and AIG to face top Idalia losses
Industry losses of $5 billion from Hurricane Idalia amongst major market-listed re/insurers could be led by US insurance carrier Progressive, well ahead of lingering leaders Chubb, Allstate and AIG, with personal lines carriers managing to take relief from reinsurance recoveries, one key equity brokerage is telling investors.
“In our base case scenario, losses appear very manageable,” Wells Fargo analyst Elyse Greenspan said, even while still working from a higher $10 billion base case scenario. A rough consensus of forecasts from cat modelers has since migrated towards the low to mid single digit billions.
Working from Florida market share and prior Florida experience, Wells Fargo pegs Progressive at $222 million in pre-tax gross losses from a $5 billion event, Chubb at $169.3 million, followed by $152.2 million for Allstate and $137.1 million for AIG. The Hartford and Travelers both fall below the $30 million mark.
Presumably, losses for the state’s residual homeowner carrier Citizens, flush with new policies from insolvencies running well into 2023, will top the broader rankings.
Personal lines carriers will ultimately drag the reinsurers into the payments, Wells Fargo indicates.
Progressive's $222 million pre-tax gross loss will be whittled down to $137.0 million once reinsurers pony up their share, Wells Fargo estimates. Allstate will cut its $152.2 million gross loss to $85.9 million.
On the hook (overall, not just for those two names) are reinsurers Everest at an estimated $69 million, RenaissanceRe at $65 million, Arch Capital at $39 million and Axis at $29 million, the Wells break-down suggests.
As a percentage of overall projected 2023 earnings, the hit to RenaissanceRe at 4.3% will be the greatest amongst firms in the Wells research universe.
Wells puts 66.3% of total industry losses to homeowners, 30% to commercial and 3.8% to personal auto. For the $5 billion scenario, that comes to $3.3 billion in homeowners, $1.5 billion in commercial and $188 million in personal auto.
The Wells Fargo coverage universe of listed firms is no proxy for the Florida market, where Berkshire Hathaway's Geico owns a major chunk of the auto market and the state residual insurer Citizens dominates homeowners and commercial after a series of major carrier failures. State Farm also figures in personal lines.
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