S&P anticipates US insurers’ earnings to take a hit from Helene

Early insured loss estimates from hurricane Helene currently sit in the mid-single to low-double-digit billions of dollars, however rating agency S&P Global believes that the losses will be an earnings event, rather than a capital event, for the primary US property & casualty (P&C) insurers that the agency rates.

Helene made landfall on September 26 in Northern Florida as a Category 4 storm with 140 mph winds.

The hurricane caused a large storm surge along various parts of the coast, while destructive wind gusts damaged properties from northern Florida to the Carolinas.

It’s important to highlight that Helene is the deadliest event to strike the US since the Hawaii wildfires in August 2023.

The hurricane claimed the lives of 215 people, making it one of the deadliest US hurricanes this century.

S&P noted that economic loss estimates of the Helene vary widely, depending on how measured, but current estimates are substantial.

As for insured losses, early estimates currently range between the mid-single to low-double-digit billions of USD.

However, if the early insured loss estimates hold up, S&P anticipates that the losses will reduce full-year earnings for some of the US P&C insurers that it rates, but should not result in a loss of capital.

A variety of analysts have suggested that insured losses from Helene, the fourth US Gulf Coast landfalling hurricane of the 2024 season, could stretch into the double-digit billions of USD. However, the consensus appears to be lie somewhere between $5 billion and $9 billion.

Recently, Karen Clark & Company pegged privately insured losses from Helene at near $6.4 billion. This figure does exclude losses to the NFIP, which are expected to be significant and potentially high enough to trigger its catastrophe reinsurance.

Earlier today, Aon stated that insurance industry losses from all perils associated with Helene, across all affected states, will likely at least sit in the higher single-digit billions of USD, with economic losses forecast to be notably higher.

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