Travelers Falls Most in Dow After Oklahoma TornadoNoah Buhayar
Travelers Cos. fell the most in the Dow Jones Industrial Average as property insurers face losses from a tornado two miles wide that flattened a suburb south of Oklahoma City yesterday.
Travelers, the lone property insurer in the 30-company average, sank 2.2 percent to $83.63 at 4:15 p.m. in New York. Allstate Corp., the largest publicly traded U.S. auto and home insurer, declined 1.5 percent.
Rescue workers are searching for survivors of yesterday’s storm, which cut a swath of devastation 20 miles (32 kilometers) long through Moore, a city of about 55,000. At least 24 people are dead, Amy Elliott, the state medical examiner’s chief administrative officer, said today after a previous tally of as many as 91 dead.
“Early reports are calling this tornado one of the largest and most destructive in Oklahoma history,” Charles Sebaski, an analyst at BMO Capital Markets, wrote in a note to clients yesterday. “Tornado losses can be material, and this loss may very well be in excess of” storms that struck Missouri and Alabama in 2011, he said.
Those tornadoes pressured insurers’ results, wiping out a quarter of profit at New York-based Travelers and Allstate. The number of tornadoes fell to 939 last year from 1,691 in 2011, according to the National Weather Service. About 250 of the storms had been reported through May 16 this year.
Policyholder-owned State Farm Mutual Automobile Insurance Co. is the biggest underwriter of homeowner’s coverage in Oklahoma by policy sales, according to 2011 A.M. Best Co. data compiled by Bloomberg.
“This mirrors Joplin, for sure,” Jim Camoriano, a spokesman for State Farm, said in a phone interview of the Missouri town struck two years ago. “It is the same horrible caliber of disaster.” He said it was still too early to estimate claims.
The Joplin storm was the costliest tornado ever, with economic losses of about $2.8 billion, according to a report today from insurance broker Aon Plc. A 1999 storm that struck Moore ranked fifth, with $1.4 billion of losses, adjusted for inflation, according to Aon.
Farmers Insurance, which has a management relationship with Zurich Insurance Group AG, was No. 2 in the Oklahoma homeowners market. Zurich climbed about 0.2 percent in Swiss trading today. Mark Toohey, a spokesman for Farmers, said in a phone interview that the insurer will proactively contact policyholders about claims and has “all hands on deck.”
Travelers has sent mobile claims offices to the affected area and will maintain additional resources in Oklahoma “as long as necessary,” said Patrick Linehan, a spokesman.
Allstate’s April Eaton said the Northbrook, Illinois-based insurer dispatched personnel to the area and has seen “very severe” damage.
Yesterday’s tornado was at least an EF-4 storm, said Ryan Barnes, a weather service meteorologist in Norman, Oklahoma. An EF-4, one level below the most powerful ranking, has wind gusts of 166 to 200 miles per hour.