US insurers face storm bill

North America

April storms are proving a costly event for US insurers. According to a report by the Insurance Services Office, the storms which raged across 17 states between the end of April and the beginning of May 2002 will cost insurers around $700mn. This is less than the $2.5bn of insured damage wrought by tropical storm Allison over the same period last year, but the figure nevertheless represents the biggest natural catastrophe loss in the US since tropical storm Alison. The hardest hit states were Virginia and Tennessee. The ISO’s estimates preceded Fitch Ratings credit analysis report on the Florida Windstorm Underwriting Association’s $1.7bn senior secured debt notes. The Fitch report, which is broadly positive, issued a stable rating outlook for the FWUA’s $750mn A rated ‘pre-event’ notes as well as to the FWUA’s AAA rated guaranteed notes. Both notes are insured by MBIA Insurance Corporation. The Fitch report, which can be located at www.fitchratings.com, covers the FWUAs operating results, claims paying resources, balance sheet quality and capitalisation.