Banking, finance, and taxes
Insurers Bracing for Hurricane Florence, More Storm Threats Coming
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Hurricane Florence is expected to hit the Carolinas as a major hurricane on Thursday evening, and it coincides with what is generally projected to be the peak-week of the 2018 hurricane season. The 11:00 a.m. update from the National Hurricane Center showed that the hurricane eye is moving toward the west near 13 mph and will begin to move west-northwestward with an increase in forward speed expected during the next couple of days. This puts North Carolina and/or South Carolina as the likely landing areas for what is already a category 3 hurricane.
The property and casualty insurance industry takes risks around insuring cars and homes, among other belongings and assets. These companies often see their shares trade lower ahead of and into major storms because the insurance losses can run rather easily into the billions of dollars.
Monday brought selling in the shares of insurers and related companies. One issue to consider at this moment is that Hurricane Florence is not the only threat. There is also Isaac, which is expected to hit the eastern Caribbean as a hurricane on Thursday before weakening to a tropical storm in the southern Caribbean this weekend.
Another major storm named Helene is out behind Isaac, but the NHC projected cone map currently projects that the storm will veer off to the north in the coming days. If that’s not enough of a lineup of storms, there is a disturbance running southeast of the Yucatan that has a 10% chance of formation in the next 48 hours but a 40% chance of development over the next five days before an expected landfall currently projected for anywhere on the Texas coastline.
The NHC bulletin said of Hurricane Florence:
On the forecast track, the center of Florence will move over the southwestern Atlantic Ocean between Bermuda and the Bahamas Tuesday and Wednesday, and approach the coast of South Carolina or North Carolina on Thursday… Satellite data indicate that maximum sustained winds have increased to near 115 MPH with higher gusts… Further strengthening is anticipated, and Florence is expected to be an extremely dangerous major hurricane through Thursday.
Allstate Corp. (NYSE: ALL) was last seen down 2.1% at $97.95, in a 52-week trading range of $88.29 to $105.36. Its market cap is $34 billion.
Chubb Ltd. (NYSE: CB) traded down 1.1% at $135.14, and it has a 52-week range of $123.96 to $157.50 and a market cap of almost $63 billion.
Travelers Companies Inc. (NYSE: TRV) was down 1.65% at $127.95. and it has a market cap of $34 billion. The most overlooked Dow Jones industrial average stock has a 52-week trading range of $118.75 to $150.55.
And in reinsurance for property and casualty insurance companies, Everest Re Group, Ltd. (NYSE: RE) was trading down 2.4% at $210.40, with a market cap of $8.6 billion. Its 52-week range is $206.91 to $264.88.
The usual suspects in Florida-based property and casualty insurance players were also under pressure on Monday.
FedNat Holding Co. (NASDAQ: FNHC) underwrites homeowners multi-peril, personal automobile, commercial general liability, federal flood and other lines of insurance in Florida and other states. Its shares were down 2.4% at $24.71 on Monday, and it has a 52-week range of $12.42 to $26.76.
HCI Group Inc. (NYSE: HCI), which primarily focuses on the property and casualty insurance business in Florida, was last seen down 1.4% at $40.17. Its 52-week range is $28.70 to $44.25.
Heritage Insurance Holdings Inc. (NYSE: HRTG) offers insurance to homes and commercial properties in Alabama, Connecticut, Florida, Georgia, Hawaii, Massachusetts, New York, New Jersey, North Carolina, Rhode Island and South Carolina. Shares of the Florida-based insurer were last seen down 1.6% at $15.08, in a 52-week range of $10.53 to $19.15.
Universal Insurance Holdings Inc. (NYSE: UVE) was down 3.2% at $44.65, in a 52-week range of $19.55 to $46.26.
United Insurance Holdings Corp. (NASDAQ: UIHC) was down 1.9% at $20.45. Its 52-week range is $14.55 to $22.23.
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