Potential impact of Hurricane Irene
Insurance
- Insurers have already lost tens of billions of dollars to disaster-related payouts this year, by some measures up to 20% more than they lost in 2009 and 2010 combined. Reports suggest that insurers have not been able to raise rates for three years amid strong competition and readily available supply, but industry analysts say even a small storm now would be enough to trigger premium hikes.
Insurance
- Insurers have already lost tens of billions of dollars to disaster-related payouts this year, by some measures up to 20% more than they lost in 2009 and 2010 combined. Reports suggest that insurers have not been able to raise rates for three years amid strong competition and readily available supply, but industry analysts say even a small storm now would be enough to trigger premium hikes.
- State Farm is the largest provider of homeowners' insurance in the Carolinas. In the commercial space, AIG is the largest insurer in Georgia and South Carolina. State Farm, Travelers, Liberty Mutual and Nationwide are also said to have significant exposures in the states that could be most affected by the storm.
Energy
- The projected path of Irene has the storm passing by a handful of nuclear power stations located in coastal areas. From Progress Energy's Brunswick Station in Georgia to Seabrook Nuclear Generating Station in New Hampshire, no fewer than six plants located on or close to the Atlantic will be exposed to the storm. Dominion, Entergy, Exelon and NextEra also own or operate one or more of these plants. For a full map of US nuclear plants, see www.nrc.gov/info-finder/reactor/.
- Crude and gasoline prices are already being impacted by the storm, as some tanker deliveries to East Coast ports have been disrupted. Refineries owned by Conoco, Sunoco and Valero are under threat from the storm, which has the potential to briefly shut in some facilities. East Coast refineries make up about 7% of the US' refining capacity. Refineries on the East Coast are located in Virginia, Delaware, Pennsylvania and New Jersey. The eight east coast refineries include PBF Energy Partners' plant in Delaware City; Conoco's plants in Linden, NJ and Trainer, Penn; Hess' Port Reading plant; United Refining's Warren, Penn plant; Sunoco's plants in Marcus Hook and Philadelphia, Penn.
Retail
- It's back-to-school school season and struggling retailers are counting on a sales surge to buoy third quarter earnings. Irene will certainly dampen sales over a key weekend that comes near the peak of back-to-school shopping. Earlier this spring many retailers were hurt by uncharacteristically stormy weather in the mid west, while online retailers actually saw a surge in shopping activity. Negative impact could be felt among department stores and apparel names. Certain mall REITs could also feel some losses as well. Some retailers may actually see an uptick in sales, as homeowners stock up on supplies ahead of the event and purchase repair materials in the aftermath. Positive impact could be felt at Walmart, Costco, Home Depot and Lowes.
NYSE Closure?
- Weather conditions have been known to close the exchange: on Feb. 10, 1969, heavy snow closed the NYSE and led to a late open the next morning at 11 a.m. The NYSE also closed during New York City's blackout on July 14, 1977. A massive snowstorm delayed the open of trade in in January 1996. There have not been any weather-related closures since then.
Good luck to friends and family in the path of Hurricane Irene and have safe.
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