Hurricane Isaac: Impact on Insurers Seen as Minimal
Claims from Hurricane Isaac are beginning to roll in, and the storm is expected to be absorbed by primary insurers with little effect on reinsurers, a ratings agency said.
A spokesman for State Farm, the largest personal-lines insurer in Louisiana, says the company has set up numerous mobile and temporary claims centers in the greater New Orleans and Lake Pontchartrain area to assist agents. Claims representatives have seen 300 residents in LaPlace, La., alone.
The company said it has received more than 16,780 claims in Louisiana and Mississippi, with more than 15,000 coming from Louisiana, primarily property claims and more than 3,500 auto claims.
The Louisiana Citizens Property Insurance Company Corp. issued a brief statement saying it has received close to 6,000 claims, of which 326 are commercial.
During a press conference Tuesday, Louisiana Insurance Commissioner Jim Donelon said the department is getting calls from consumers—primarily questions about coverage and reporting claims—“but frankly, they are not ringing off the hook.”
He noted that in the areas worst affected by flooding, there was not a high penetration of flood insurance and that up to 50% of residents may not be covered. He cautioned that the number was not a firm figure.
Standard and Poor’s issued a report saying the magnitude of Hurricane Isaac would not have a significant impact on the creditworthiness of the insurance industry. Few, if any, rating changes are expected to result from the storm, S&P added.
S&P went on to say that because many insurers retain a greater proportion of catastrophe property risk, reinsurers will generally be unaffected if insured losses fall within the range of $1 billion to $2 billion.
Hurricane Isaac made landfall on Aug. 29 as a Category 1 hurricane. Despite the seemingly low intensity of the storm, it was a slow mover, dumping as much as 25 inches of rain in some areas.
On Friday, AIR issued an estimate that insured losses could reach as high as $2 billion.
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