Property / non-life insurance companies are well positioned to weather a major hurricane this year, despite significantly higher losses in 2017 and 2018, according to Fitch Ratings Inc.
Overall, US policyholders' surpluses increased by 6.2% over two years to $ 757 billion by the end of 2018, the Chicago-based rating agency said in a statement on Monday.
"Given the significant capital positions of insurance companies, it would probably take a record individual storm loss or confluence of significant loss events, which could mean disasters, investment losses, and loss reserves to degrade insurers enough to justify downgrades," said Chris Grimes, insurance inspector in the statement.
Although the National Oceanic and Atmospheric Administration predicts the mean levels of hurricane activity this season, the number of storms that make landfall and their intensity is more important to insurers and residents than the number o Fitch said.
"Determining these factors is still very uncertain , which makes the insurers' vigilance in dealing with disaster exposures and risk aggregations crucial, "according to Fitch.
Traditional reinsurance capital is also expected to remain strong in 2019 so The sector has shown resilience to the increased disaster losses experienced in recent years, according to Fitch. However, the use of alternative capital has continued to grow in 2019 and the market for disaster bonds has seen large national sponsors driving disaster bond issuance together with smaller insurance companies with high risk exposure and expanding the use of insurance-linked securities.
Disaster Experts urged companies and individuals to prepare for the coming hurricane season and other potentially catastrophic events.