Allstate, Travelers Among Insurers Pressured by ‘Frankenstorm’

Friday, 26 Oct 2012 02:05 PM

 

Share:
  Comment  |
   Contact Us  |
  Print  
|  A   A  
  Copy Shortlink

Allstate Corp., Travelers Cos. and Chubb Corp. fell as a weather system that’s expected to form from Hurricane Sandy and two other storms threatens to lash the U.S. East Coast with wind and rain and knock out power.

Allstate, the second largest U.S. home and auto insurer, fell 1.6 percent to $39.87 at 12:33 p.m. in New York. Travelers slipped 1 percent and Chubb, the insurer of high-end homes, sank 1.2 percent.

The system, dubbed “Frankenstorm” by the National Weather Service, may increase claims costs for property insurers that have benefited this year from lower catastrophe costs than in 2011. Insured losses may be $5 billion in the U.S., with the biggest portion in Pennsylvania, according to estimates from Kinetic Analysis Corp. and compiled by Bloomberg.

“Most of the affected areas are pretty population-dense,” Mark Dwelle, an analyst at RBC Capital Markets, said in a phone interview today. “There aren’t a lot of safe landing spots.”

The hybrid storm may strike anywhere from the Delaware- Maryland-Virginia peninsula to southern New England. The current National Hurricane Center track calls for the system to move between Baltimore and Wilmington, Delaware, on Oct. 30, a day before the U.S. holiday Halloween.

Mark Schussel, a spokesman for Warren, New Jersey-based Chubb, and Jennifer Wislocki, a Travelers spokeswoman, had no immediate comment. April Eaton, a spokeswoman for Allstate, said it’s too early to estimate losses, and the company is positioning personnel along the East Coast to evaluate claims after the storm strikes.

Record Capital

As of 11 a.m. New York time, Sandy was a Category 1 hurricane with winds of 80 miles (129 kilometers) per hour, down from 100 mph earlier, according to the hurricane center in Miami. It was 25 miles north-northeast of Great Abaco Island in the Bahamas and 460 miles south-southeast of Charleston, South Carolina, moving northwest at 10 mph.

Policyholder-owned State Farm Mutual Automobile Insurance Co., the largest U.S. auto and home insurer, sold the most coverage exposed to storm damage in the states that may be affected by the weather system, according to a report Friday from JPMorgan Chase & Co. Northbrook, Illinois-based Allstate was the second-largest, followed by Travelers. Chubb was ninth, according to the report.

Property-casualty companies have record levels of capital and will probably be able to continue to generate more “even if the industry experiences substantial catastrophic losses” in the fourth quarter, JPMorgan said in the report. Reinsurers, which help insurers bear the costs from some of the costliest disasters, typically cover about half of insured losses, the analysts said.

“It’s not a crippling storm,” Ed Noonan, chief executive officer of Bermuda-based reinsurer Validus Holdings Ltd., said in an interview. “It’s just it’s unusual to have a storm of this size this late in the year.”

© Copyright 2014 Bloomberg News. All rights reserved.

Share:
  Comment  |
   Contact Us  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved