Life and health insurance carriers should face minimal financial impact from Hurricane Katrina.
Some officials had speculated that the death toll from Katrina might exceed 10,000, but authorities are reporting that they are finding fewer casualties than they had feared.
Analysts from Standard & Poor’s Ratings Services, New York, and Moody’s Investors Service, New York, are predicting that few, if any, life and health ratings actions will result from the Gulf region storms and flooding.
Moody’s analyst Robert Donohue says the geographic and line-of-business diversification will dilute any effect that Katrina might have.
The smaller, regional insurers that might face some strain are not rated, and early indications are that the majority of people who died carried relatively low insurance coverage, Donohue writes.
“Mortality and health claims are expected to be fewer than might normally be expected,” Donohue writes.
“The secondary impact from the storm from investment losses and operational disruption for insurers should also be light for the life and health companies in Moody’s universe,” Donohue adds.
In a similar vein, Standard & Poor’s in a published report says few rated life and health insurers have significant concentrations of risk in the affected markets, “primarily because of their overall geographic diversity or focus.”
But, in the same report, S&P says 10 property-casualty insurance groups may face unusual financial strain as a result of Gulf region storm losses.