Impact of hurricanes on US insurance stocks

This paper analyzes the impact of hurricanes on insurance stock returns in the United States. The objective is to assess the reaction of insurance stock prices caused by hurricanes using an extensive data sample consisting of the costliest hurricanes since 2004. We aim to understand the insurance stock price reactions and provide possible explanations for the observed results. The main outcome is a negative abnormal return for all examined time windows. Analyses of impact factors show that high-category hurricanes have more negative abnormal returns in comparison to low-category hurricanes. The latter category is even positively correlated with the cumulative abnormal return. The regression model indicates a statistically significant negative correlation between the cumulative abnormal return and the damage caused by the hurricane.