Hurricane Dorian will cost the insurance industry at least $25 billion in losses, according to analysts at Swiss investment bank UBS Group AG.
If the Category 5 catastrophe affects the eastern coast of Florida, however, it could inflict losses of up to $40 billion, according to the analysts, Bloomberg News reported.
Apparently, the last natural disaster that caused over $25 billion of insured damages was 2017’s Hurricane Maria, according to Munich Re, which records a database of the biggest losses.
The world’s largest reinsurers have maintained capital in excess of $30 billion since the industry has benefited from relatively few major disasters since Hurricane Maria, according to UBS.
But the financial institution estimates that the likely damages from Dorian would consume much of that capital, possibly causing reinsurers to adjust their prices with estimates of around $70 billion in natural catastrophe losses in 2019.
In 2017, insurance firms faced record bills of more than $135 billion from hurricanes, wildfires and earthquakes, according to Reuters.
Dorian — which already is the most powerful natural disaster to make landfall in the Atlantic since the 1935 Labor Day hurricane — is closing in slowly toward the US east coast.