Hurricane Irma Looms, Florida Insurers’ Shares Fall
Shares in Florida home insurers fell Tuesday as investors braced for losses as Hurricane Irma appeared set to hit the state Saturday.
Shares in Heritage Insurance Holdings (NYSE:HRTG) hit record lows and were last down 15% at 9.58 with trading volume 2.1X its 10-Day MA.
Universal Insurance Holdings (NYSE:UVE) shares tumbled about 18% and are on track for their biggest 1-day percentage drop since November 2015.
Irma strengthened into a highly dangerous Category 5 storm, with winds of 157 mph or higher, on Tuesday as it barreled toward the Caribbean and the southern United States, threatening deadly winds, storm surges and flooding.
“If Irma continues its current path it will create significant insured damage,” said an insurance analyst . “It’s quite easy for them to wipe out all their earnings for the year.”
Shares in HCI Group (NYSE:HCI) were down 13.5% at 33.45, hitting their lowest since December, with trading volume 3.9X the 10-day moving average.
Shares in United Insurance Holdings were down 9.4 percent, hitting their lowest point since February, with trading volume 3.4 times the 10-day moving average.
Larger insurance companies with a broader geographic exposure were also down on Tuesday after tumbling last week on expectations of massive losses from Hurricane Harvey, which devastated parts of Texas and Louisiana last week.
Travelers Co. (NYSE:TVR) was down 1.9% after a 5% drop last week and Progressive Corp. was down 2.0% after last week’s 5.7% fall, while Chubb Ltd. fell 1%.
Another big hurricane in the same year “adds another level of financial losses even for the big companies with enormous capital bases.”
A 2nd hurricane “strains the system” as insurers will have a harder time getting enough people to do loss adjustments in order to settle claims as quickly as possible, he said.
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