Still responding to the aftermath of Hurricane Harvey, Hartford-area property casualty insurers are preparing for a new round of claims as Hurricane Irma approaches Florida.
“This is something we plan for,” said John Kinney, chief claims officer for The Hartford Financial Services Group. “We have to plan for two big storms back-to-back.”
Irma may be the more damaging of the two storms to insurers’ bottom lines. Most of the destruction from Harvey was due to flooding, which is not covered by typical homeowners’ policies.
According to an investors note released Wednesday from Wells Fargo Securities, Irma could deliver more than $30 billion in insured losses, exceeding the high-end estimate of $20 billion in insured losses that Harvey may yield.
The most severe scenario, senior analyst Elyse Greenspan wrote in the note, would be a direct hit to Miami.
“Insured losses would potentially be the largest in that scenario and could be the largest level of insured losses from a hurricane on record,” she wrote.
At The Hartford, Kinney said their catastrophe team is centrally located outside of Chicago and responds across the country. Additional personnel are brought in as needed. The response to Harvey includes employees from 20 states, who are expected to remain in Texas for another couple of months.
Insurers have rarely seen a storm as strong as Irma, which has delivered maximum sustained winds of 185 mph. Kinney offered Hurricane Sandy as a comparison, which battered the Northeast with strong winds.
One lesson learned from Sandy, Kinney said, was the effect of a major catastrophe on small businesses. Many had to close their doors due to the storm, meaning even if their storm damage was covered, they still suffer losses due to the days that they weren’t open.
“Back up your information to the cloud, grab your policy, document your facility,” Kinney said. “You want to be able to get back on your feet as soon as you can. Small businesses in Sandy had trouble getting back on their feet.”
Neither The Hartford nor the Travelers Cos. have a significant share of the residential insurance market in Florida, but they both have customers in Irma’s path, and Travelers is among the top 20 auto and commercial insurers.
“We are closely monitoring Hurricane Irma at our National Catastrophe Center to make sure we can quickly deploy … teams to assist affected customers with the right resources as soon as it is safe to do so,” Matt Bordonaro, Travelers’ head of media relations, said in an email.
Mobile claim offices and FAA-certified drone operators will join employees who are already positioned on the ground in the region, Bordonaro said.
“It is likely this storm will be more of a wind event than a flood event,” said Sean Kevelighan, CEO of the Insurance Information Institute. “We urge anyone in the path of the storm to listen to local authorities, while also doing what is needed to prepare, such as reinforcing windows with shutters and taking a home inventory, if time permits. If you have to evacuate, bring your financial documents, including your insurance policy, so you can start the claims process once the storm has passed.”
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