Home insurers’ stock prices plummeted Tuesday after Hurricane Irma, which is expected to make landfall in Florida in the next few days, strengthened to a Category 5 storm.
Shares of insurers who provide property and casualty homeowners’ insurance in Florida took big losses in anticipation of the storm. HCI Group, Universal Insurance Holdings and Heritage Insurance Holdings, all insurers tied to Florida, fell 13%, 16% and 13%, respectively.
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Reinsurance giants XL Group and Everest also took a hit, falling 5% and 4%, respectively, according to a
CNBC report.
In fact, Tuesday was insurance stocks’ worst day of the year so far, according to
CNBC. The S&P Insurance Industry index was down 1.9% at midday, on pace for its worst performance since Brexit battered the index in June of 2016.
Irma’s winds are currently topping 175mph, making it one of the strongest Atlantic hurricanes on record. While it’s not clear yet where Irma will hit, a landfall in Miami could be catastrophic,
CNBC reported.
“There is no modern historical precedent for a Miami hurricane, because the last direct hit was back in the 1920s,” Roberto Friedlander, head of energy trading for Seaport Global Securities, told
CNBC. “A direct hit from Irma could disrupt rail and container activity, and damage infrastructure for transportation, in addition to putting thousands of lives at risk. Combined with rainfall, then we are looking at catastrophic flooding to a vast area that already has problems with water levels. Real estate risks are simply gigantic.”
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