ScrippsNews:
So much for Katrina, the sequel.
After suffering through the most destructive hurricane season on record in 2005, insurance companies braced themselves for another tough year in the Gulf Coast region. Computer models predicted as many as 10 hurricanes this year, roughly half of them potentially deadly major storms.
Barring any last minute disasters, the final tally of hurricanes to hit the US this year will stand at… zero, a number that not even the most optimistic analyst dared to predict.
‘What’s surprising is this was predicted to be an active hurricane season,’ said Donald Thorpe, an insurance analyst with Fitch Ratings, a credit rating agency. ‘That hasn’t happened.’
No hurricanes means no losses. And no losses means insurance companies such as Allstate Corp. and St. Paul Travelers Companies are suddenly awash in profits. Some analysts think the unexpected windfall might create pressure for lower premiums in the Gulf Coast, where rates rose dramatically after Katrina.
But don’t count on it, experts say. If anything, insurance rates are not high enough to cover losses from another Katrina-style catastrophe, industry officials say. Insurers lost $40 billion on Katrina alone, making it the costliest hurricane in history. Read more.
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