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Texas hailstorm damage to impact property insurers' earnings, A.M. Best says


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Texas hailstorm damage to impact property insurers' earnings, A.M. Best says

Damage caused by hailstorms in Texas so far in 2016 is expectedto exceed the nine-year average for the U.S., according to an A.M. Best Briefing.

Insured losses estimated at $1.3 billion caused by two hailstormsin March are expected to increase further. The Dallas-Fort Worth region of Texaswas hit by another hailstorm in mid-April, which is expected to result in more insuredlosses than the previous two hailstorms, according to the report. Total hailstormdamage in the U.S. in 2015 was below the nine-year average of $1.2 billion, A.M.Best said.

However, ratings actions due to the hailstorms are expected tobe limited because affected P&C companies are expected to maintain sufficientoverall risk-adjusted capitalization relative to their existing financial strengthratings, A.M. Best said.

Property insurance writers will suffer losses from broken windowsand roof damage. The events are expected to impact underwriting performance andoverall earnings of the insurers.

Although automobile physical damage will cause significant lossesto companies heavily concentrated in the market, the impact on most insurance writersshould be mitigated given the large economies of scale of major writers in the market,A.M. Best said.