European insurance sector stocks remained under pressure Tuesday amid a rebound in broader markets as investors looked to the staggering bill for Hurricane Harvey and braced for a dangerously gathering storm in the Caribbean that is expected to hit South Florida later this week.
Florida Governor Rick Scott declared a state of emergency last night after the National Weather Service upgraded Hurricane Irma, which is quickly gaining speed in the West Indies, to a Category 4 storm and warned of "catastrophic outcomes", including uprooted trees and disabled power lines, as a result of its 150 mile-per-hour winds.
"Preparations should be rushed to completion as tropical storm-force winds are expected to arrive in the hurricane warning area by late Tuesday," the NWS said in a statement.
I have declared a state of emergency for every FL county to help state, federal and local governments work together as we prepare for #Irma.— Rick Scott (@FLGovScott) September 4, 2017
Irma is first expected to make landfall in Puerto Rico on Wednesday, the U.S. National Hurricane Center has forecast, with the island territory already declaring a state of emergency for its 3.4 million citizens.
Reinsurance group Scor SE (SCRYY) was marked 0.26% lower in early Paris trading at €34.86 each while German rivals Munich Re (MURGY) and Hannover Re (HVRRY) were seen 0.13% and 0.45% lower respectively against a solid 0.6% gain for the DAX performance index. In Zurich, Swiss Re (SSREY) , which makes up the so-called "Big Four" of European reinsurance groups, was little-changed at Sfr85.80 each, compared to a 0.7% gain for the benchmark SMI.
Earlier this week, Texas Governor Greg Abbott pegged the cost of Hurricane Harvey and the resulting flood damage at between $150 billion to $180 billion, a figure that, if accurate, would make it the most costly storm in U.S. history.
"When you look at the number of homes that have been mowed down and destroyed and damaged, this is going to be a huge catastrophe that people need to come to grips with," Abbott told CNN Sunday. "It's going to take years for us to be able to overcome this challenge."
Risk Management Solutions, a California-based group that models catastrophic events, has estimated that the National Flood Insurance Program will need to pay between $7 billion and $10 billion in Harvey-related claims, triggering around $1 billion in reinsurance coverage. It's early estimate for overall damage from Harvey in Texas and Louisiana is between $70 billion and $90 billion.
"The majority of the overall loss is likely to be from inland flooding in the Houston metropolitan area, where there are over seven million properties representing over $1.5 trillion in value," RMS said.
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