Insurance stocks are getting hammered ahead of Hurricane Matthew
The biggest loser of the group is Universal Insurance Holding Corp., a Florida-based insurer, that has fallen more than 15% on the day. The firm holds licenses to operate in nearly every state the hurricane is expected to impact.
Here's a few other firms with large Florida businesses that are also seeking their stocks get hit:
- Heritage Insurance, another Florida-focused insurers, is down roughly 13%.
- Federated National Insurance, has fallen just over 8%.
- United Insurance Holding Corp has sunk just over 8%.
Even larger insurance companies that are more diversified are seeing their stock slide before Matthew hits. Toronto-based insurer Fairfax Holdings was down a little over 3% in trading. The rest of the market is about even for the day.
Investors may be anticipating large pay outs from the insurers to policyholders in the impacted areas. Large pay outs can hurt the bottom lines of the firms.
Hurricane Matthew is expected to make landfall Thursday night just North of Miami. The intensity of the storm has increased over the past few days to a Category 4 hurricane and it is expected to bring a storm surge of 5 to 9 feet and sustained winds last measured at 140 miles per hour.
Florida Governor Rick Scott warned residents of impacted areas that "this storm will kill you." The storm previously killed an estimated 20 people in Haiti. There are 2 million people living in the areas of Florida, Georgia, and South Carolina that are being evacuated.
