Hurricane Irma's damage could be the largest ever in the U.S., Barclays predicts

By Industries FOXBusiness

Hurricane Irma is the strongest Atlantic storm ever, meteorologist says

Weather 2000 chief meteorologist Michael Schlacter weighs in on the strength of Hurricane Irma and its impact to the southern Florida region.

Barclays (BCS) research said Tuesday that incoming Category 5 storm, Hurricane Irma, which is expected to hit Florida later this week or early next week, could be the largest ever in insured damage in the U.S., topping the record currently held by Hurricane Katrina in 2005.

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"Given the potential magnitude of this storm as well as the potential to impact a highly populated area, we think Irma's insured damage in Florida could be the largest ever in the U.S. perhaps equivalent to Hurricane Katrina," Barclays' Jay Gelb wrote Tuesday.


"In a worst case scenario, catastrophe modelers AIR Worldwide and Karen Clark and Co. have estimated a repeat of the 1926 Miami hurricane could result in $125-130 billion of insured damage,” Gelb added.


According to the National Hurricane Center, Irma became the strongest hurricane on record in the Atlantic basin outside of the Caribbean Sea and the Gulf of Mexico, with winds topping 175 mph.


Barclays says it “views Irma as more of a risk to the traditional reinsurers as well as third-party providers of reinsurance capital than the primary commercial insurers and personal lines insurers based on the industry’s long-standing view that Florida poses substantial windstorm risk.”


Of the companies Barclays covers that could be among the largest exposed to Irma include Everest Group, XL Group, Validus Holdings, RenaissanceRe Holdings, and Aspen. All of the reinsurance companies mentioned in the report fell more than 5% during Tuesday trading with XL Group being the single worst performer in the S&P, down 6%.

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Last week, Goldman Sachs projected property damages from Hurricane Harvey, which slammed into Texas last month, to be in the range of around $30 billion which is below Hurricane Katrina’s insured damage of around $50 billion.

Additionally, JPMorgan released similar predictions for Harvey, pegging damages around $10 billion to $20 billion.
 

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