Hurricane Francine to have minor impact on reinsurers, seen as very manageable for P&C space: RBC

Analysts at RBC Capital Markets expect Hurricane Francine to be a highly manageable loss event for the P&C insurance industry, most likely in the very low billions, with a minimal impact to reinsurers.

On September 11th, Francine made landfall in southern Louisiana, the parish of Terrebonne as a Category 2 storm with winds of up to 100 mph.

Based on early reports, losses from the storm will likely result from a combination of wind-related damage, flooding, and storm surge, say analysts.

Ultimately, analysts do not expect Francine, the sixth named storm of the season, to be a major loss event for P&C insurers and sees the total likely falling somewhere in the very low billions.

“We don’t think that the loss totals will rise much to the level where reinsurers will have noteworthy losses from Francine,” say analysts at RBC.

Recently, cat risk modeller CoreLogic pegged wind and storm surge insured losses from the storm at up to $1.5 billion, so in line with comments from RBC.

As noted by analysts, the overall number of tropical storms and hurricanes so far this year (6) is tracking below what many weather forecasters had been predicting (20-25), but half of the tropical storms in the Atlantic have formed into hurricanes that ultimately made US landfall.

In July, Hurricane Beryl hit Texas with estimated insured losses of $2.5-4.5 billion, followed by Hurricane Debby’s landfall in Florida in August with estimated insured losses of $1-2 billion.

“Collectively, the insured loss total so far between the three hurricanes is manageable in our view although up from 2023’s light hurricane season,” say analysts.

Regarding Francine, RBC expects multi peril homeowners writers in Louisiana to shoulder most of the losses, with larger carriers with a presence in commercial lines or personal likely to have some loss exposure from Francine.

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