The insurance industry is bracing for a potentially severe hurricane season as Beryl pounded the Texas coast early Monday. Wall Street analysts have identified some insurance stocks most at risk from future dangerous storms. Over the past few days, Beryl moved through parts of the Caribbean and Mexico before slamming into Texas with heavy rains and strong winds. Analysts said Beryl’s strength and timing were ominous signs that this year’s hurricane season could be active. “Hurricane Beryl was the earliest Category 5 hurricane recorded in the past 100 years, reinforcing our view that the 2024 hurricane season will be active,” Morgan Stanley analyst Bob Jian Huang said in a client note. “We believe sea surface temperatures will continue to be conducive to hurricane development.” Even milder storms could cause deaths and injuries and wreak havoc on energy, agriculture and financial assets. While insurance losses are hard to predict, analysts looked at the market share of disaster-prone insurers to assess their potential exposure to hurricane risk in Texas and other regions. Most Exposed Stocks Insurance stocks typically fall when a hurricane makes landfall and often rebound when the scale of insured losses becomes known. Meanwhile, dangerous storm seasons often see higher demand and higher premiums early the following year. “Typically, when weather events are large, the most exposed stocks react the most,” Piper Sandler insurance analyst Paul Newsom said in a note. “We expect that companies whose market share is most exposed to hurricanes will also be the most exposed to hurricanes.” [catastrophe] “In Texas, trending lines like homeowners and commercial multi-peril will see the biggest declines,” he said. Newsom said companies he insures with the most weather exposure include Allstate, Progressive, Chubb, AIG and Travelers, while companies with Gulf Coast-specific exposure include Florida-focused companies like Heritage and Universal Insurance. Morgan Stanley surveyed the largest property and casualty insurers in Texas and cited Allstate, Progressive, Travelers and Chubb as notably affected. The Wall Street investment bank noted that all of these companies cover commercial multi-peril, farm, federal and private flood, fire, homestead, multi-peril crop and inland marine insurance.
Beryl and the insurance companies most affected by the active hurricane season
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