Insurance Losses from Hurricane Francine Expected to be Manageable, Report Finds

Losses from Hurricane Francine are projected to remain in the low single-digit billions for the insurance sector, according to a preliminary estimate from Gallagher Re.

The hurricane posed a threat to New Orleans and the Gulf Coast, reaching as far east as the borders of Alabama and Florida on Wednesday. This situation led to the shutdown of about 25% of oil and gas production in the Gulf, while various parishes in Louisiana issued evacuation orders.

Insurers are expected to face wind and water-related losses that could total around $1 billion. However, this figure may increase to the low single-digit billions if the storm’s path shifts further eastward toward the densely populated New Orleans metro area, as indicated by the reinsurance broker in their report.

Early Wednesday morning, the U.S. National Weather Service warned that conditions were predicted to worsen throughout the day, with coastal areas at risk of experiencing a storm surge of up to 9 feet.

The preliminary loss estimates are subject to change once the hurricane makes landfall. Nonetheless, these findings may provide some reassurance to those concerned about the potential impact on the insurance industry, which has been responsible for billions in claims related to weather-related disasters in recent years.