shutterstock_703441525-1
23 September 2022Insurance

Fiona insured losses could be ‘manageable’ but depend on business interruptions

Hurricane Fiona has knocked out infrastructure in Puerto Rico and the Dominican Republic, the countries hit hardest by the category 4 tropical cyclone, though a report from AM Best suggests that insured losses are expected to be “manageable” but would largely depend on the “recovery and resilience” of the affected carriers.

The Dominican Republic experienced widespread flooding and property damage, with popular tourist destinations left without electricity, AM Best said. However, a large part of the insurance portfolio is concentrated near Santo Domingo, the country’s capital, with less distribution in the regions where a greater impact from the hurricane is expected, it noted.

The expected insured losses from Fiona may “depend on the duration of business interruptions due to power losses,” suggests AM Best, noting that it could take some time for claims adjusters in Puerto Rico to assess and estimate damages.

According to the Best’s Commentary, the top 10 insurers in Puerto Rico account for more than 90% of the market share for the auto, fire and allied lines, homeowners/farmowners and commercial multi-peril (property) lines. Two of these groups are “extremely well-diversified, multinational insurers,” but six of those top 10 companies are insurers with 100% of their exposure concentrated in Puerto Rico, representing approximately 43% of the market share for these lines of coverage most at risk for sizable claim activity.

The agency’s associate director, industry research and analytics, David Blades highlighted that insurance companies on the island have taken “significant action to manage their risk profiles” since Hurricane Maria in 2017, including tightening their underwriting guidelines, sharpening risk management techniques, improving pricing and getting significant rate increases.

“Furthermore, most losses are expected be flood-related and not covered by a standard homeowner policy,” Blades noted. “Those losses would fall under the National Flood Insurance Programme.”

Did you get value from this story?  Sign up to our free daily newsletters and get stories like this sent straight to your inbox.

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
23 September 2022   Hurricane-force winds extend 115 miles from centre; Nova Scotia in line today.
Insurance
22 September 2022   Fiona will take 130 mph winds west of Bermuda tonight, approach Nova Scotia Friday.
Insurance
26 September 2022   Ian will hit major hurricane status near Cuba; western Florida can’t avoid mid-week hit.