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Member, Beacon International Group, Ltd.
Hurricane Isaac losses should be “manageable” for property/casualty insurers, according to an analysis released Tuesday by Barclays Capital Inc.
Barclays said it expects insured losses from the hurricane to be less than $5 billion. That would be equivalent to 1% or less of the U.S. property/casualty insurance industry's capital, according to Barclays.
“Our sense is insured losses should be manageable for P&C insurers and are unlikely to result in higher P&C prices,” said Barclays in “U.S. Insurance/Non-Life: Hurricane Isaac Losses Should be Manageable for P&C Insurers, Not a Catalyst for Improved Pricing.”
Barclays said primary insurers are likely to retain most of the risk associated with Hurricane Isaac, although reinsurers could experience “modest” losses.
“P&C prices are rising, although the pace of price increases appears to have stabilized,” said Barclays. “Importantly, rate increases exceed loss cost inflation, which could translate into underlying margin expansion for the top tier insurers in 2013.”