Reinsurers Bear the Brunt of Hurricane Matthew Insurance Claims
FOR IMMEDIATE RELEASE
October 11, 2016
Contact: Michael Williams
Reinsurers Bear the Brunt of
Hurricane Matthew Insurance Claims
TALLAHASSEE, FL – It could have been much worse, but on Thursday and Friday, Hurricane Matthew left a path of destruction along Florida’s East Coast. Thousands of homes and businesses were damaged by the storm and insurers will spend the next few weeks assessing the damage and reviewing insurance claims. But homeowners won’t see a jump in their insurance premiums because of this storm, thanks to good luck and prudent decisions by the Florida Legislature over the past decade.
In the 12 years since a record-breaking string of hurricanes made landfall in Florida, the Florida Legislature and regulators have made strategic investments in the Florida Hurricane Catastrophe Fund (FHCF) and taken advantage of the historically low cost of reinsurance. By allowing the Cat Fund and Citizens to build up reserves and buy reinsurance that shifted risk out of state, the Legislature created an environment where Floridians will not see drastic increases to their monthly premiums.
Initially, Hurricane Matthew was forecasted to cause upwards of $20 billion in damage to the Southeastern United States. However, as the storm weakened and tracked farther out to sea, industry leaders are now estimating a loss of between $5 and $10 billion. While Matthew did cause substantial damage to Florida, the event was far from the catastrophe that was originally feared.
“Although Hurricane Matthew's effect is still being assessed, it appears that the damage from the storm is far less than it could have been,” said Tom Feeney, President and CEO of Associated Industries of Florida. “Florida will continue to have a positive financial outlook because of the risk that has been offset by investments in the FHCF.”
“Florida consumers can rest assured that their monthly premiums will not skyrocket,” said Bill Newton, Deputy Director of the Florida Consumer Action Network. “A substantial portion of the claims associated with the storm will ultimately be paid out by a pool of new money flowing into the state, primarily from a global network of reinsurers who have diversified their risk.”
Stronger Safer Florida is a nonpartisan coalition comprised of business, consumer and environmental groups from throughout Florida. This diverse membership reflects the broad support for changes to the state-run Citizens Property Insurance Corp. and the Florida Hurricane Catastrophe Fund. The coalition believes that by returning Citizens Property Insurance Corp. back to the insurer of last resort and “right-sizing” the Florida Hurricane Catastrophe Fund, we can better protect all Floridians as well as environmentally sensitive areas throughout the state. Follow @StrongerSaferFL on Twitter.