While a majority of property losses following Hurricane Ian will fall within the insurance industry’s modeling estimates of up to $50 billion, auto may be the outlier and surprise carriers and reinsurers to the upside, said W.R. Berkley CEO William R. Berkley Jr.
Saying that the September storm will focus its most significant losses on the US government’s National Flood Insurance Program (NFIP), Berkley said that the private market may feel the pain will be concentrated in auto line.
“What I would tell you is that it's likely this is going to prove to be a very, very significant flood issue, which obviously will impact the loss for many on the homeowner side and on the property side. Obviously, auto is a different animal,” Berkley said during the company’s third-quarter earnings call. “I think the auto loss is likely to prove to be far more severe than maybe the models would have initially suggested. “
As may as 50,000 vehicles may be lost as a result of Hurricane Ian, according to analytics from Cox Automotive. Cox added, however, Ian’s losses will likely be a fraction that Hurricane Harvey produced in 2017 with over 300,000 vehicles damaged.
Adding that he thought that the overall modeled range of Hurricane Ian losses were correct, Berkley added that the larger issue is how those losses are expected to the divided by business line.
“It's not that we take any particular great issue with the numbers. And sort of that $50 billion to $70 billion as bookends, that's probably not a bad range,” Berkley said. “That having been said, I think the way it's going to get allocated amongst product lines may prove to be a little bit different than what people anticipated. And my best guess is that it's probably between those bookends, towards the lower end than the higher end.”
Greenwich, Connecticut-based Berkley reported a third-quarter profit of $228.9 million, or 82 cents. Adjusted quarterly earningswere $1.01 per share.
