Hiscox reckons Hurricane Harvey will have cost $150m

Caitlin Morrison
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Epic Flooding Inundates Houston After Hurricane Harvey
Houston was devastated by floods in the wake of Hurricane Harvey (Source: Getty)

Insurer Hiscox has released its first estimate of the cost of Hurricane Harvey, which hammered the US Gulf Coast earlier this month.

The FTSE 250-listed group has forecast net claims of around $150m (£110m), based on an insured market loss of $25bn. This figure is within the company's modelled range of claims for an event of this nature, and "reinsurance protections for the group remain substantially intact", Hiscox said.

It's been estimated that the insurance sector on the whole will have to pay out more than $15bn as a result of Hurricane Harvey. Weather forecaster AccuWeather has predicted that the storm will cost up to $190bn overall.

"Insurance exists to help individuals and companies recover from the devastation caused by events like this, and our priority is to pay claims quickly so that they can do that," said Hiscox chief executive Bronek Masojada.

"At the same time, Harvey has also highlighted the lack of flood cover for large parts of the US market."

Masojada added that 2017 "will be an expensive year for natural catastrophes but the industry can cope".

"Insurance remains a cyclical business and after a long period of price reductions, insurance rates in the affected areas and in specific sectors such as large property are likely to increase," he said.

"In the wider global insurance market for large risks, we expect rates to stabilise and begin to increase."

The company said it would update the market on the estimated cost of Hurricane Irma "once the impact of that storm has become clearer".

Shares in Hiscox were down more than one per cent at the time of writing.

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