HURRICANE HELENE UPDATE

Last Friday (27th September), Hurricane Helene hit the coast of Florida’s Big Bend as a category 4 hurricane. It moved through Georgia, reducing in intensity and then over the weekend, it was downgraded to a tropical storm. This was a path similar to last year’s Hurricane Idalia although Helene was stronger in terms of wind speeds. Unfortunately the death toll is higher than Idalia with more extensive flooding from the surge in Tampa Bay.

The Argenta view is that the insurance impact is still to early to accurately predict and despite the strength of the hurricane, where it hit landfall was not densely populated. The current estimates for total market loss are between $5bn - $10bn but these figures are likely to be updated for the further potential impact of both flood and commercial loss. The aggregate market loss is important as the larger the loss, the more likely that reinsurance protections become engaged.

It is likely that National federal flood program (a government agency) has sustained a large loss in addition to the private market. Lloyd’s has an approximate share of the US Property and Casualty market of 5% and is significantly underweight as a property reinsurer. Our expectation is that Lloyd’s direct share of the market’s Helene loss will be far less and again, initial estimates indicate the market loss would impact the combined ratio by less than one percent. Many Lloyd’s syndicates buy their own catastrophe excess protections from outside of the Lloyd’s market so it is possible that the impact of the hurricane to syndicates will be quite modest.

We will continue to monitor the situation, and provide further updates as we develop our understanding of the event.