Ian King on Fox Business News – Hurricane Florence Insurance Losses & Stocks
Only about 3% of North Carolina residents and 9% of South Carolina residents had flood insurance when Hurricane Florence hit. Hurricane Florence had $20 billion worth of damage, down from the original estimate. During Hurricane Katrina, Allstate’s stocks dropped $10. Insurance companies are now in a better position than they were before. They’re sitting on about half-a-trillion worth of capital, because insurance products are very good investments because they are not correlated to the stock market’s return. If you’re a pension fund or hedge fund, you can invest in reinsurance bonds or catastrophe bonds and have access to the insurance sector without actually buying the stock – giving the insurance companies much more capital than they had 15 years ago. More info here.