Home Markets Analysts Projecting $25 Billion Loss for Insurance Due to Hurricane Dorian

Analysts Projecting $25 Billion Loss for Insurance Due to Hurricane Dorian

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According to a UBS analyst Hurricane Dorian, which beat the Bahamas early Monday, could cause damage of almost $25 billion to the insurance industry. Known as the second-strongest storm in Atlantic on record, Dorian was forecasted to hit the archipelago over the day. Authorities also evacuated more than a million residents in Georgia, South Carolina, and Florida as the Dorian slowly makes it way towards the US east coast. 

UBS Adjusting their Model 

With the solvency principal in jeopardy, UBS increased its base from $15 billion to $25 billion. They also restructured their model with a range of $5 billion to $40 billion to mirror a broader potential insurance loss. The forecaster estimate of about $70 billion of natural calamity losses this 2019. He also added that this could raise prices and erode extra capital.

With record bills of $135 billion in 2017 that insurers handled from wildfires, earthquakes, and hurricanes. In 2018, the insurers were able to get some break.

UBS stated Swiss Re’s stock as its least favored and said that it is unlikely for a second buyback, with SCOR, Beazley, and Lancashire is set to increase most with the accumulation in cost.