Oil markets and insurers rattled by Hurricane Harvey as damage cost estimates reach $20bn

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Epic Flooding Inundates Houston After Hurricane Harvey
Damage to property and vehicles could result in huge payouts (Source: Getty)

Hurricane Harvey costs to the US insurance industry could be as much as $20bn (£15.5bn), making it one of the biggest payouts in American history alongside Hurricane Katrina.

JPMorgan said in a note to clients today that insured losses could be between $10bn and $20bn. Another estimate by Chuck Watson, a disaster modeller at Enki Research, claimed the number could be as high as $30bn. Total insured losses for Hurricane Katrina in 2005 came to $41bn.

However Michael Barry, a spokesperson for the Insurance Information Institute, a non-profit funded by the insurance industry, told City A.M. it was too soon to make any concrete estimates.

Read more: Oil prices climb as Hurricane Harvey makes its way towards Texas

But he said there would be a considerable combined cost owing to the different claims on homeowner policies, business owner plans and applications to the National Flood Insurance Program.

US insurance companies took a hit on the stock market today as it became clear that the fallout of the storm would be widespread. At lunchtime in New York, shares in Travelers Companies Inc were down over 2.5 per cent, Allstate Corp had fallen over 1.5 per cent, and Progressive Corp was down 2.5 per cent.

Oil stocks were also affected in the face of refinery shutdowns in the Gulf of Mexico. West Texas Intermediate (WTI) dropped 3.5 per cent and Brent futures were down 1.3 per cent.

Read more: Revealed: Worst global natural catastrophes of 2017 so far

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