The pace of economic recovery for areas affected by Hurricane Ian could be slow compared with previous hurricanes, according to the experts at Fitch Ratings.
President Biden described Hurricane Ian last week as the “deadliest storm” in Florida’s history.
Fitch, which provides credit ratings and analysis, still is assessing not-for-profit life plan/continuing care retirement community exposure but said that it appears that CCRCs in the hurricane zone “have generally avoided significant damage.” There will likely be some business disruption where clean-up or repairs are needed, however, the authors said.
CCRCs will get some Federal Emergency Management Agency aid and business interruption insurance, Fitch noted, but it is unknown how long it might take to receive those funds.
Fitch Ratings said it expects rebuilding to occur in Florida, Georgia and the Carolinas due to the desirability of the area, but this time around, the company said, there are greater numbers of uninsured homeowners and businesses as a result of the higher cost of insurance coverage/policy non-renewals. Tight labor market conditions, inflationary pressures and supply chain issues also could slow down recovery, according to the report. Additionally, Fitch said, “extensive property damage could lead to higher property tax delinquencies, ultimately lowering tax base values.
“Homeowner insurance coverage, or lack thereof, may play a greater role in community recovery than in prior hurricanes. Blanket homeowner policies do not cover flood damage, and many homeowners do not carry flood insurance,” the ratings agency said. “With increasing hurricane risk, property insurers have left the Florida market, and remaining insurers have raised premiums or are not renewing policies as they expire.
Fitch said it expects local government ratings in Florida affected by Hurricane Ian to remain stable.
“Most of Fitch’s rated municipalities have a high degree of fiscal resilience and robust reserves to manage storm expenses as they await reimbursement from federal and state disaster aid programs,” the company reported.
Public finance lenders should be able to withstand the effects of the hurricane, according to the financial experts. Smaller lenders might have a slightly more challenging time maintaining their credit quality because of lesser resources and financial flexibility, the report stated.
