THE CATEGORY Four storm Hurricane Ian that hit the southwest coast of Florida earlier this month is set to cost insurers $30-40bn (£27-£36bn), according to new analysis from S&P Global.

However, US insurers are currently well positioned to absorb losses due to having sufficient reserves to weather any financial hit, the ratings agency said in a new report.

Hurricane Ian hit the Fort Myers metro region of southwest Florida on 28 September, killing at least 30 people.

The hurricane, which saw wind speeds of up to 155mph, had a significantly larger footprint than previous hurricanes, while causing storm surges of 12-18 feet.

The fact Hurricane Ian hit the heavily populated Fort Myers area also heightened the level of damage the storm caused.

As such, the damage caused by the hurricane is likely to be at the upper end of estimates, S&P Global said.

Florida's state-backed non-profit insurer, which has a 13 per cent share of Florida's insurance sector, expects losses of about $3.8bn, implying an industry-wide loss of around $30bn.

The US insurance sector is however well positioned to pay out on claims, due to it being the first major hurricane of the year, meaning any losses should fall within annual catastrophe budgets.

Yet catastrophe budgets will likely be fully expended or surpassed by the end of the year in line with previous years, the report said.

(c) 2022 City A.M., source Newspaper