Could Hurricane Jeanne be the tonic required to save the insurance market from a spiral of softening? Hiscox certainly thinks so, with the announcement that it has revised its 2005 business plan in order to take advantage of expected rate increases stemming from the recent hurricanes.
Hiscox had originally planned to reduce the capacity of Syndicate 33 from £847m to £725m due to the weak US dollar, but now intends to write £775m, subject to Lloyd's Franchise Board approval, because the hurricane losses "should have a positive effect on the rating environment".
Early estimates suggest Hurricane Jeanne could cost the industry anywhere between $4bn and $14bn, but it is the combined loss from Hurricanes Charley, Frances, Ivan and now Jeanne that insurers are banking on.
Current estimates put the combined industry loss from the four hurricanes at $21bn to $26bn, which would outstrip the last major hurricane event year, 1992, when Hurricanes Andrew and Iniki cost the industry $22bn, adjusted for inflation.
