On Thursday, Hurricane Irma continued its path of destruction through the Caribbean after hitting Barbuda, St. Barthélemy, St. Martin, Anguilla and the British Virgin Islands, as well as the U.S. Virgin Islands and Puerto Rico yesterday.
Many industries have felt the impact of Irma already, and the storm has yet to make landfall here in the United States.According to the National Weather Service, the storm is projected to hit the central Bahamas by Friday, and then make landfall near Miami, Florida by Sunday morning as a Category 4 hurricane, “bringing high winds, abundant rainfall and potentially dangerous storm surge.”
From the greater travel industry to airlines and restaurants, companies that have broad exposure to Florida have seen their shares slide on anticipation of Irma’s impending arrival. For more information, read:
Irma, as well as the aftermath of Harvey, has also taken a toll on the insurance market, and this past Tuesday marked one of the worst days of 2017 for insurance stocks. Today is no better, and the S&P 500 Insurance Industry Index (IUX) is down over 2% in afternoon trading, on pace for what could be its worst daily performance since Brexit lows back in June 2016. The SPDR S&P Insurance ETF (KIE - Free Report) is down nearly 2.5%.
Like other industries, insurance companies with a huge presence in Florida are being hit the hardest. HCI Group (HCI - Free Report) , known for its largest subsidiary Homeowners Choice Property & Casualty Insurance Company, is down over 10% in afternoon trading. Headquartered in Jacksonville, HCI provides property and casualty homeowners insurance, condominium-owners' insurance and tenants insurance.
Another big name is Universal Insurance , which is currently down 14.75%. Universal is based in Fort Lauderdale, and through its subsidiary Universal Property & Casualty Insurance Company (UPCIC), is engaged in insurance underwriting, distribution and claims.
Heritage Insurance Holdings (HRTG - Free Report) and United Insurance Holdings (UIHC - Free Report) are two other Florida-focused insurance players that have seen their stocks fall over the past few days. Headquartered in Clearwater and St. Petersburg, HRTG and UIHC are currently down over 5% and nearly 9% in afternoon trading.
Other insurance stocks affected include Allstate Corp. (ALL - Free Report) , Alleghany Corp. (Y - Free Report) , Chubb Ltd. (CB - Free Report) , Cincinnati Financial (CINF), Progressive Corp. (PGR - Free Report) , and Travelers Companies (TRV - Free Report) , all of which have seen their stocks move downwards today.
Companies who offer reinsurance, or when multiple companies purchase insurance policies from other insurers to limit the total loss the original insurer would experience in case of a disaster, are also at risk. Everest Re (RE - Free Report) and RenaissanceRe (RNR - Free Report) , for example, are down 6.76% and 3.6% today.
Experts are already predicting that Irma could be the biggest ever in insured damage in the U.S., even surpassing the record held by Hurricane Katrina in 2005. According to Barclays’ Jay Gelb, "In a worst-case scenario, catastrophe modelers AIR Worldwide and Karen Clark and Co. have estimated a repeat of the 1926 Miami hurricane could result in $125-130 billion of insured damage.”
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