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December 14, 2022
Without question, the most significant insurance market impact of late 2022 was Hurricane Ian, with insured losses upward of $60B. Ian impacted the Southwest Florida coast on September 28, as a Category 4 hurricane with sustained winds of 115 mph and a storm surge of 10-15 feet. Nearly 150 fatalities were recorded, making this the deadliest hurricane to strike this area in more than 80 years.
Even prior to Ian, those in the direct and facultative (D&F) markets were advising clients to expect increases of 10-15% in their treaty renewals due to other storm and wildfire losses. Ian no doubt adds significantly to that pressure. Reinsurance rates are likely to increase by 20% or more, accompanied by a reduction in capacity.
Standard markets will attempt to “de-risk” their portfolios, and they’ll give greater scrutiny than ever before to construction quality. The encouraging news for the market, as well as for insureds, is that structures built in accordance with the most recent building codes and those that were designed and sited to better withstand high wind and elevated surges exhibited limited damage from Ian. To learn more about pricing, renewals, and other pertinent information as it relates to the Real Estate Market, please read our latest Markets In Focus :: Real Estate Q4 2022.
The views and opinions expressed within are those of the author(s) and do not necessarily reflect the official policy or position of Parker, Smith & Feek. While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it.