Hurricane Katrina will become the most expensive insurance loss in U.S. history, surpassing Hurricane Andrew and the terror attack of Sept. 11, 2001, and could cause the insolvency of some small insurers in its wake.
Fitch said it expects losses to be on the high end of estimates and to surpass any insured loss the U.S. has yet experienced. It said a loss of "this magnitude always has the potential to stress or even render insolvent some insurers." It said the smallest insurers with concentration of risk face the greatest threat, while large insurers should manage. Some, however, may face downgrades.
"However, it is still too early to tell if this is the case and, if so, who is at risk of financial distress," Fitch said.
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