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The official start of the Atlantic hurricane season on Monday could signal more steep losses for insurers and reinsurers, already battered by the impact of the coronavirus pandemic on their underwriting and investment positions.
However, recent years of hefty damage from hurricanes and high claims due to the pandemic mean property rates at a key June 1 renewal date are expected to get pushed up by as much as 50%, providing an income boost.
Meteorologists are forecasting that the Atlantic 2020 hurricane season, which officially finishes on Nov. 30, will be above average.
“What we’ve seen over the past couple of years is an increase of (storm) losses from a frequency and severity perspective,” said Susan Fallon, Global Head of Property at Zurich Insurance Group.
“There’s an expectation we will see increased rates.”
Lloyd’s of London this month forecast more than $100 billion in underwriting losses from the pandemic in 2020, with those losses coming before the hurricane season even gets going.
The specialist insurance market said the pandemic losses were similar in size to the loss year of 2005 - when Hurricane Katrina hit New Orleans - and 2017 - when Hurricanes Harvey, Irma and Maria hit Florida, Puerto Rico and Texas.
Those hurricane years were exceptional but this year could also be costly.