Hurricane Ian reveals challenges of Florida’s property insurance market – report
Hurricane Ian is one of the most severe tropical cyclones to make landfall in Florida – and its resulting economic loss could break records, a new report from DBRS Morningstar has found.
The global credit rating agency has projected that economic losses from Ian are likely to surpass $50 billion – the record previously set by Hurricane Irma in 2017. DBRS Morningstar has also estimated that of that $50 billion, between $25 billion and $40 billion could be insured losses.
“Given a storm path and intensity similar to Hurricane Charley and considering the substantial increase in population and property values in Southwest Florida, economic losses could potentially reach above $50 billion, which would be a record for a Florida-centric storm,” commented DBRS Morningstar vice president of insurance Patrick Douville.
Douville added that claims arising from Ian will add to the persisting trend in Florida as a state that is becoming more and more expensive and difficult to insure.
“Impacts of climate change, such as rising sea levels and coastal erosion, combined with high population and property value growth in coastal areas, will add to the existing woes of the Florida insurance market, which has seen multiple insurer failures in recent years,” the vice president said.
Read more: Hurricane Ian threatens Florida’s already unstable insurance market
It was also noted that four out of the five past years have seen some of the worst tropical storm losses in Atlantic America’s history.
“As providing property insurance coverage in Florida is a challenge, insurers must be selective with the risks that they choose to insure and make appropriate use of diversification and reinsurance,” DBRS Morningstar concluded in its report.