Rick Wilking | Reuters
A woman uses a coat hanger to try and retrieve an item from a destroyed house after Hurricane Harvey struck Fulton, Texas, August 26, 2017.
Shares of property insurance giant Travelers declined more than 2 percent on Monday as investors weighed potential losses from Hurricane Harvey’s assault on Houston.
The stock also had the biggest decline of the 30 stocks in the Dow Jones industrial average and was on track for its worst day of the year.
Travelers in 2017
Other insurance stocks also fell, including Progressive and Allstate. The SPDR S&P Insurance exchange-traded fund (KIE) fell 0.9 percent and was on pace for its worst day since June 21.
Harvey, a Category 4 hurricane that later weakened into a tropical storm, ravaged Houston and other parts of Texas this weekend. Some areas in the state were hit with more than 30 inches of rain.
Elyse Greenspan, senior analyst at Wells Fargo Securities, said in a note Sunday that insured losses were expected to range between $1 billion and $6 billion before the hurricane hit, but that could change.
“Storm surge and flooding add a level of uncertainty to the level of losses (as the initial estimates do not include flood losses),” Greenspan said. “Flooding has the potential to add to losses—not covered under homeowners policies, but could add to commercial lines share of the losses.”
“Flooding is covered under commercial and auto policies, but is excluded from homeowners’ coverage,” she said. “There is the potential for a significant amount of flooding from the storm surge associated with Harvey. Further, Harvey was expected to stall in Texas for many days bringing additional flooding across Texas.”
In a separate note, JPMorgan analyst Sarah DeWitt told clients on Monday that the storm could result in insured losses of $10 billion to $20 billion, which would make it one of the 10 most costly hurricanes to hit the U.S.