New Yorkers, fresh from an earthquake, are now bracing themselves for Hurricane Irene.
At the same time, insurers for all of the East Coast, from Maine to Florida, are also keeping a close eye on the storm’s path for several reasons. Some experts have estimated that if the storm makes ground near New York City or Boston, it has the potential to be a $10 billion disaster.
The storm’s impact on New York City will play a key role in the calculation of total storm damage, as four of the most costly floods in the past 30 years, in terms of insurance claims paid, have included the New York region.
The threat of the storm may also give renewed interest to the proposed catastrophe fund that we posted about last year.
Of course, there are some who believe Hurricane Irene’s silver lining may be its potential influence on firming up an insurance market which has been unable to raise rates in several years amid oversaturation of the market and heavy competition. This trend, coupled with the increase in worldwide natural disasters in 2009 and 2010, has crippled some insurers in recent years. So while the eastern seaboard braces for Irene’s impact, the insurance and reinsurance markets carefully await to see its multi-faceted impact on the industry.
Thanks to Chris O’Leary for his contribution to this post. If you would like more information, please write to firstname.lastname@example.org