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Insurers are bracing for a hit of between $28 billion and $47 billion from Hurricane Ian, in what could be the costliest Florida storm since Hurricane Andrew in 1992, according to U.S. property data and analytics company CoreLogic, Reuters reported. Wind losses for residential and commercial properties in Florida are expected to be between $22 billion and $32 billion, while insured storm surge losses are expected to be an additional $6 billion to $15 billion, according to CoreLogic. "This is the costliest Florida storm since Hurricane Andrew made landfall in 1992 and a record number of homes and properties were lost," said Tom Larsen, associate vice president, hazard & risk management, CoreLogic. More than two million homes and businesses were without power in Florida early on Friday, as Hurricane Ian barreled toward South Carolina leaving behind widespread damage in the Sunshine State. The insurance industry also expects tourism sector losses in Florida. Read more.

ABI's thoughts are with the residents of Florida and other regions who have been affected by the flooding and destruction caused by Hurricane Ian. Read a note by ABI Executive Director Amy Quackenboss about ways to support the victims of Hurricane Ian in whatever way you can.

Property and casualty insurers operating in Florida say they are just beginning the massive effort of assessing damage left by Ian’s assault through southwestern and Central Florida on Wednesday and Thursday, the South Florida Sun Sentinel reported. Accurate damage estimates might not be available for days, after teams of adjusters fan out and assign dollar amounts to the wreckage they inspect. Early estimates by catastrophe risk modelers project that Ian’s insured losses in Florida — excluding claims to the National Flood Insurance Program — will be in the $30 billion to $50 billion range, according to Reinsurance News and an investor-focused website artemis.bm. Fitch Ratings estimated insured losses between $25 billion and $40 billion. Meanwhile, stock prices for publicly traded insurers and reinsurers exposed to losses in Florida were stable on Thursday, suggesting the investment community believes that the cost of rebuilding what Ian damaged won’t break the industry. Florida’s Office of Insurance Regulation will begin collecting daily claims and loss totals from all insurers beginning Friday. After hurricanes, the office typically posts running tallies on its website. State Farm Florida, one of the state’s three largest insurers, received 4,300 claims by 3:30 p.m. Thursday, mostly from Lee, Charlotte, Orange, Collier, and Polk counties, spokeswoman Heather Paul said.

Hurricane Ian is speeding toward the Gulf Coast of Florida at a perilous time for property owners in the state, who have been weathering an insurance crisis that the Category 4 storm could now exacerbate, NBCNews.com reported. Numerous insurance companies in Florida have closed their doors in recent years in a slow-moving collapse for the industry, forcing rates to spike and property owners to turn to the state-owned insurer of last resort. “Florida’s property insurance market was the most volatile in the U.S. before Hurricane Ian formed and will most likely become even more unstable in the wake of the storm,” said Mark Friedlander, a director at Insurance Information Institute in Florida. Flaws in laws and regulations allowed insurers to be overrun by claims or operate with little financial responsibility and oversight. These issues have created problems in the market that have shepherded many insurers toward closure or left them on precarious financial footing. A dozen insurance companies operating in Florida have gone out of business since January 2020. Six were deemed insolvent this year. Most recently, a court found that FedNat Insurance Co. would need to be liquidated because of ongoing financial troubles, leaving 56,000 policies canceled. Nearly 30 Florida insurance companies are on the state regulator’s “Watch List” due to financial instability, and a major storm could put them in a further tenuous position and make it harder for people to insure their homes and collect on claims.

State regulators on Friday asked a judge to place a property-insurance company in receivership, making it the sixth Florida property insurer declared insolvent this year amid widespread financial problems in the industry, the Miami Herald reported. The Florida Department of Financial Services sought to be appointed receiver for FedNat Insurance Co., which canceled 56,500 policies in May and reached an agreement to transfer about 83,000 policies to another company in June. Despite shedding the policies, FedNat remained responsible for claims and other types of obligations from before June 1, according to court documents. It notified the state Office of Insurance Regulation on Sept. 13 that it did not have enough money for what is known in the insurance industry as a “runoff” of the obligations.

Bond insurer Ambac Financial Group Inc cannot prove its $2.7 billion case against Bank of America over troubled mortgage-backed securities on evidence that BofA was a "bad actor" before the 2008 financial crisis, an attorney for the bank said yesterday in New York state court, Reuters reported. Ambac seeks to recoup more than $2 billion in insurance claims it paid to cover investor losses on securities backed by 375,000 home loans from Bank of America's Countrywide unit. As the trial in the 12-year-old case opened on Wednesday, an attorney for the bond insurer argued that Countrywide's own files show it systematically approved shoddy mortgages and pushed the risk onto investors and insurers. But that type of evidence is not sufficient to show the bank violated insurance agreements it made with Ambac, said the bank's attorney Enu Mainigi in her opening statement. Courts have ruled in other cases that insurers must prove such agreements were breached on a loan-by-loan basis, she said. Mainigi also said it was Ambac that accepted more risk in order to cash in on pre-2008 optimism in the housing market, until the financial crisis undermined borrowers' ability to repay their loans. "Now Ambac is here asking this court to conclude that somehow all of this is Countrywide's fault," she said. Between 2004 and 2006, Ambac insured securities backed by Countrywide loans worth $25 billion. The insurer claims 80% of the loans were the product of poor underwriting standards or had other deficiencies that violated insurance agreements, and that Bank of America failed to repurchase the loans as required.

Florida homeowners will see another surcharge included on their insurance premiums in 2023 in order to help the Florida Insurance Guaranty Association (FIGA) cover the claims from insurance companies that have gone into receivership, ABCActionNews.com reported. This new charge is the second to hit homeowners this year and the third in the last two years. When an insurance company goes insolvent and is liquidated, the FIGA steps in and takes on all of its existing claims and pays back premiums. From 2013 to 2020, the nonprofit never had to issue these assessments, but as multiple companies went into receivership last year, they took on thousands of claims and hundreds of millions in financial responsibility. FIGA’s executive director Corey Neal, just before May’s special session, said they had about 8,000 claims and expected maybe 2,000 more in coming months, many of those from St. Johns and Avatar Insurance. However, that was a serious underestimate because just three months later, after Southern Fidelity and then Weston went under. Now, FIGA has about 14,000 claims it needs to pay out.

A COVID-19-driven life insurance buying spree has ended, with sales activity falling back nearly to prepandemic levels, according to new data from two industry research firms, the Wall Street Journal reported. Applications for life-insurance policies fell 6.5% year to date through mid-August, compared with the same period in 2021. They are down 1.5% in that period compared with 2020, when fear about the coronavirus began translating into increased shopping for policies, according to MIB Group Inc., an organization that tracks applications for life insurers. Application volume year-to-date through mid-August is up 2% compared with the same period in 2019, meaning that the industry hasn’t given back all of its sales momentum, said MIB Chief Operating Officer Andrea Caruso. Historically, about 70% of applications end up in purchases. Changes made during COVID-19 could keep sales up, the industry hopes. During the pandemic, many carriers expanded online and other direct-to-consumer options. Some relaxed requirements for blood and urine samples, and some stepped up use of digital medical records as a way to size up the health risk of applicants and avoid ordering new in-person tests. Still, a sales rebound will face obstacles besides people’s procrastination. Among them: Since mid-2020, some prominent life insurers have either entirely quit selling a highly popular type of policy known as “guaranteed universal life.” Such policies promise that the annual premium bill won’t increase during the owner’s lifetime. That means the insurer is on the hook for any miscalculations it makes in its original pricing. In other types of universal life, consumers bear the risk of premium increases.

Another Florida insurance company declared bankruptcy, WFLA.com reported. Florida’s insurance commissioner has declared Weston Property & Casualty Insurance insolvent. This comes days after Demotech withdrew the company’s rating. Demotech on Monday also withdrew financial stability ratings for FedNat Insurance Co. and changed United Property & Casualty Insurance Co.’s rating from “A Exceptional” to “M Moderate,” the Associated Press reported. The move raises concerns for homeowners who could end up paying more for insurance amid the state’s ongoing homeowners insurance crisis. The Associated Press reported that the moves follow reports from last month that said Demotech planned to downgrade anywhere from 17 to 27 insurers from an “A” rating to ratings of either “S,” for substantial, or “M.”