Hurricane Dorian could cost insurers $25B

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Former FEMA Director on prepping for a hurricane: Insurance is the first line of defense

Former FEMA Director Brock Long with the latest on Hurricane Dorian and why it is important for homeowners to have insurance.

Hurricane Dorian, which battered the Bahamas early on Monday, could cause insurance industry losses of up to $25 billion, according to analysts at UBS.

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Dorian, the second-strongest Atlantic storm on record, was forecast to pound the archipelago through the day, then move slowly towards the east U.S. coast, where authorities ordered more than a million people evacuated in Florida, South Carolina and Georgia.

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UBS analysts updated their model to reflect a wider potential industry insured loss range of $5 billion to $40 billion and raised their base case to $25 billion from $15 billion, with solvency capital at risk.

The analysts estimate about $70 billion of natural catastrophe losses for 2019 and added this could erode excess capital and raise prices.

Insurers faced record bills from hurricanes, earthquakes and wildfires of over $135 billion in 2017 and got some relief in 2018.

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UBS named Swiss Re as its least preferred stock and said its second buy-back was unlikely, with Lancashire , Beazley and SCOR set to gain most from an uptick in prices.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Carolyn Cohn)