As Hurricane Florence hits the East Coast of the US, S&P Global Ratings anticipates that the storm will be an earnings event, not a capital one. According to the agency, the majority of insured losses will remain with the insurance sector rather than reinsurers, as storm surge and wind-related damage are likely to be the most damaging aspects of the hurricane. Florence has been downgraded to Category 1, after briefly strengthening to a Category 4 storm at least twice in the past week. “The current forecast accumulation is below that experienced during Harvey last year when combined with the topography of the region and pre-existing soil conditions due to a wet season for the east coast, anticipated rainfall increases the flood risk considerably. As a result, the National Flood Insurance Program could also end up taking a bigger hit,” reads S&P’s briefing regarding the storm, which has already begun to impact the North Carolina coast with heavy rainfall. S&P does not anticipate needing to take any rating actions as a result of Florence, if insured losses are anywhere within the range of $8bn-$20bn, even taking into account Munich Re’s estimated $17bn global insured catastrophe losses for the first half of 2018. However if catastrophes for the second half of the year match the frequency experienced last year, then some re/insurers could be in trouble, especially as a number of reinsurers look to shore up their capital positions following 2017’s disasters. Florence is not expected to have any widespread impacts on re/insurance rates or rated catastrophe bonds. S&P also does not expect any of the bonds it rates to be triggered by Florence, even assuming a high end insured loss estimate of $20bn.