(Reuters) - Florida’s insurance and reinsurance market is well equipped to handle hurricane losses, but Irma could strain the state’s coverage market depending on the extent it makes landfall in Florida, according to rating agencies.
Irma, the second major hurricane to approach the United States in two weeks, is expected to make landfall in south Florida on Sunday morning.
Fitch said if the storm were to produce insured losses greater than $75 billion, some Florida insurers and reinsurers could experience “notable financial strain”.
Irma hit the Dominican Republic and Haiti on Friday, heading for Cuba and the Bahamas.
The projected path and severity of Irma creates the potential for economic and insured losses to significantly exceed those experienced in Hurricane Andrew in 1992, Fitch said.
Strong capitalization of the insurance and reinsurance sector will help mitigate the impact of Irma, S&P Global Ratings said.
Reporting by Pallavi Dewan in Bengaluru; Editing by Shounak Dasgupta