The insurance industry is bracing for a likely tough hurricane season as Beryl struck the coast of Texas early Monday. Wall Street analysts identified several insurance stocks with the most at risk from future dangerous storms. Over the past few days, Beryl cut a deadly path through parts of the Caribbean and Mexico before sweeping into Texas with heavy rains and powerful winds.
The intensity and timing of Beryl served as an ominous sign that this hurricane season could be an active one, analysts said. "Hurricane Beryl was the earliest CAT-5 Hurricane on record over the past 100 years, confirming that 2024 Hurricane Season will be an active one, in our view," Morgan Stanley analyst Bob Jian Huang said in a note to clients. "We believe ocean surface temperature continues to be conducive for hurricane formation.
" Even mild storms can result in fatalities and injuries while wreaking havoc to energy, agriculture and financial assets. While difficult to predict insurance losses, analysts looked at the market share of catastrophe-prone carriers to assess their possible exposure to hurricane risks in Texas and elsewhere. Stocks with the most exposure Insurance stocks typically fall as a hurricane makes landfall and often rebound after the size of the insured losses become known.
Meanwhile, a dangerous storm season often raises policy prices at the start of the following year amid a rise in demand. "Typically, if a weather event is large, the stocks with the most exposure react the m.