This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

What If the Real 'Big One' Hits the Northeast?

Of course, Florida factors heavily in the above figure, with a 51% probability of a hurricane making landfall and a 21% probability of a major hurricane hitting during 2013.

Breaking its probabilities down by state, the Tropical Meteorology Project said that the probability of a hurricane making landfall in New York during 2013 was 8%, with a 3% probability that a major hurricane would hit. For New Jersey, the probability of a hurricane hitting land is 1%, with a probability of less than 1% for a major hurricane. For Connecticut, the probability of a hurricane strike is 7%, with a 2% probability for a major hurricane hitting land.

Big Insurers Have Strong Reserves


It's too early to calculate the total amount of insured losses for U.S. property and casualty (P&C) insurance carriers this year, as claims for damage caused by Sandy are still being processed.

Insurance Information Institute president and economist Robert Hartwig says there's "an enormous range" of estimates ranging from $10 billion to $25 billion. "when you put them all together you come up with a figure of $18.8 billion, as sort of a midpoint at all the ranges, which would put Sandy in the number 3 spot for insured losses from hurricanes," behind Katrina and Andrew, which devastated southern Florida in August 1992.

Hartwig says that "the industry entered the 2012 hurricane season very strong financially and it finished the season very strong financially despite Hurricane Sandy and despite the fact that 2011 was the fifth most expensive year for insured catastrophic losses in the U.S., and the most expensive globally."

"Sandy is generally categorized as an earnings event and not a capital event," he says. "It does reduce fourth-quarter earnings, but the industry is no longer impaired by a lack of capital going forward."

When asked whether or not the large P&C carriers have sufficient reserves to survive a major hurricane strike in the Northeast, Hartwig doesn't mince words: "Absolutely. There are many scenarios for events larger than Sandy, in the $30 billion range, for a Category 3 or Category 4 storm. It is far more likely that something like that would hit the Long Island area," than it would be for a major hurricane to hit other areas, he says.

"There are models for a repeat of the 'Long Island Express' storm of 1938, also known as the 'Great New England Hurricane.' Such a storm could cause over $30 billion in loses according to various models, but this is exactly the type of event for which the industry plans.

2 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,915.07 -70.54 -0.42%
S&P 500 1,964.68 -8.15 -0.41%
NASDAQ 4,396.2040 -22.83 -0.52%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs