Fitch Ratings anticipates losses related to Sandy will be largely borne by primary insurers, but estimates remain uncertain.
Hurricane Sandy has the potential to produce losses similar to Hurricane Irene, which struck the East Coast in 2011 and generated insured losses of between $4 billion-$5 billion. Loss estimates for Sandy will be influenced considerably by the landfall location and actual storm path. A more northern landfall nearer to the more densely populated New York City area would potentially generate higher losses.
Fitch expects the brunt of losses to be borne by primary writers, including State Farm, Allstate, Liberty Mutual Group, and Travelers, based on market share positions in the Mid-Atlantic and New England regions. Market share was calculated based on direct written premiums and gives no consideration for reinsurance. The likelihood of losses being allocated to the reinsurance industry increases if losses come in at the higher end of the range.
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