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Fitch: Insurers Well-Prepared for Hurricane Season

The U.S. property-casualty insurance sector is well positioned for the 2018 hurricane season.
Fitch: Insurers Well-Prepared for Hurricane Season
June 5, 2018

Fitch Ratings Inc. reports that the U.S. property-casualty insurance sector is well positioned for the 2018 hurricane season. Forecasts expect this year's season to be about average in terms of storm generation. Fitch says aggregate industry policyholders’ surplus grew 7.5 percent in 2017 to a record $765 billion, as elevated underwriting losses were offset by higher total investment returns.

Although primary U.S. insurers incurred significant losses in 2017, the nature of last year’s storms led to a sizable portion of the financial fallout to be shouldered by offshore reinsurers, alternative capital, and the National Flood Insurance Program (NFIP).

Early forecasts of the upcoming June 1 to Nov. 30 hurricane season suggest the forces that help develop tropical storms appear to be neutral and indicate a near-average season. Hurricanes Harvey, Irma and Maria combined to produce $80 billion in insured losses last year, Fitch said, making 2017 the second costliest hurricane season in North America, trailing 2005 when Hurricanes Katrina, Rita, and Wilma caused insured losses of $107 billion in 2018 dollars.

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