A.M. Best Briefing: Insurers Withstand Historic South Carolina Flooding

OLDWICK, N.J.--(BUSINESS WIRE)-- A.M. Best has released a new briefing exploring the impact on the insurance industry of the recent widespread flooding in South Carolina. The Best’s Briefing, titled, “Insurers Withstand Historic South Carolina Flooding,” states that most top homeowners and automobile direct writers in that state have diverse national geographical and product profiles and possess strong risk-adjusted capitalization, comprehensive reinsurance programs and solid overall risk management capabilities, and thus, are prepared for an event of this magnitude.

According to the National Oceanic and Atmospheric Administration, the torrential rains over three days in parts of South Carolina were the equivalent of a one in 10,000-year rainfall event or greater, particularly in the more populated areas. Records were set across the state for the 24-hour, two- and three-day rain events as more than 20 inches fell in some locations, resulting in damage to businesses, homes and automobiles.

The impact of this weather anomaly on the insurance industry has already been apparent, as claims are already being filed and insurers have agents and adjusters ready to respond to the anticipated surge of claims in the coming weeks.

From an insurance coverage perspective, damage from rain driven by wind is covered by the standard homeowners policy; however, flood damage from rising waters is not, as such losses are covered by government backed National Flood Insurance Program (NFIP) policies. Regarding automobile losses, flood and water damages are covered by comprehensive policies, which are only mandatory for automobiles when they are financed. This policy, along with NFIP, is optional and in both cases, not everyone carries them. These factors will temper the overall loss impact to the insurance industry.

The report notes that for smaller, more geographically specific, writers in the area with potential concentration and scale issues, it will take more time as claims are reported and classified to determine the extent of the impact to capitalization and profitability.

For the full copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=242651.

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.

Copyright © 2015 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

View source version on businesswire.com: http://www.businesswire.com/news/home/20151019006126/en/

A.M. Best
Raymond Thomson, ARe, ARM, 908-439-2200, ext. 5621
Senior Financial Analyst
[email protected]
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
[email protected]
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
[email protected]

Source: A.M. Best Company, Inc.

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