Hurricane Harvey's whipsaw of wind and rain across Houston and the Texas Gulf Coast has hurt the shares of US property and casualty insurers, as Wall Street analysts estimate insured losses as high as $20 billion.
That would make it one of the costliest storms in history for US insurers, but could ultimately help insurers and re-insurers to raise rates, some analysts said, after a period of low premiums.
"Our best guess at this point is Harvey could result in $10 billion to $20 billion of industry insured losses, making it one of the top-ten most costly hurricanes to hit the United States," JPMorgan analyst Sarah DeWitt said in a research note.
Swathes of Houston were underwater yesterday, the effect of Harvey sweeping ashore on Friday as the most powerful hurricane to hit Texas in 50 years.
It has since been downgraded to a tropical storm, but more rain is expected to fall on the fourth-largest US city.
Damage caused by flooding is not included in standard homeowners insurance policies and is covered by the US government.
However, flood damage to businesses is covered by commercial policies, said Ms DeWitt, which could result in "meaningful losses for the commercial re-insurers and insurers."
JPMorgan's and other estimates are currently well below the $75 billion in insured losses caused by Hurricane Katrina hitting New Orleans in 2005, but are likely to grow.
Shares of Travelers Companies and Allstate Corp, two of the largest homeowners insurers in Texas, fell 2.6% and 1.5% respectively on the New York Stock Exchange.
Shares of Progressive Corp, a large car insurer in Texas, fell 2.3%.
