The insurance industry is “well-poised” to deal with the possible impact of Hurricane Irma on Florida, according to an insurance research group.
The storm, currently a Category 5, tore through several Caribbean islands on Wednesday and could make Florida landfall this weekend.
Concern about the potential devastation caused insurance stocks to plunge on Tuesday. On Wednesday, they recovered some of those losses.
Insurance Information Institute CEO Sean Kevelighan told CNBC’s “Closing Bell” Wednesday there should be better awareness of just how well-equipped the industry is to weather the storm.
“The industry currently has about $700 billion in surplus ready to pay claims. So it’s ready to withstand this crisis. It’s ready to withstand any natural catastrophe,” he said.
That amount well exceeds that of the most expensive year in history, 2005, which was about $77 billion in losses, he pointed out.
Hurricane Irma looks like it will be a more wind-related event, as opposed to Hurricane Harvey, which became an inland-flooding event, Kevelighan said.
Standard homeowners and business policies cover wind-caused property damage. However, a separate flood insurance policy is needed for damage caused by floods.
— CNBC’s Linda Sittenfeld contributed to this report.