Unless you have been living under a rock, you know that Hurricane Harvey is causing unprecedented damage to Southeastern Texas, primarily the city of Houston. The main issue is flooding rains which by the end of the storm could stand at over 40 inches. Some reports estimate that the storm could cost as much as $40 billion on the Texas coast. Adding the costs of repairs to interior Texas and this storm will easily be one of the most expensive ever.
How does this affect the ordinary investor? There are many ways, but the largest is insurance companies. There is no doubt there will be millions of claims from auto owners, homeowners and businesses, looking to get money for the repairs needed.
Today’s post is going to look at the biggest insurance companies in the area and see the impact the storm will have on their business going forward. It will also highlight some stocks that could stand to profit.
Insurance Companies In The Path Of The Storm
There are a handful of insurers in the area that will be affected by the hurricane. On the commercial side of things, here are the largest insurers based on market share in the state of Texas:
On the homeowners and automobile side of things, the following insurers have a large market share in the area:
How This Will Impact Investors
Shares of these companies already took a hit from traders, realizing the damage and the cost to pay out claims. But going forward, it’s not all good news for these insurers.
In the short term, you will have the companies miss estimates and try to recover lost premiums by raising premiums on insured throughout the country. They will also face the potential of lawsuits that could drag out for years.
All told, the rest of the year will be a volatile one for insurance stocks as they will react to both good and bad news as it relates to Hurricane Harvey.
