The Allstate Corporation (ALL), Travelers Companies Inc (TRV), The Chubb Corporation (CB): The Economic Aftershocks of Hurricane Sandy

Real-estate losses
For those who have to rebuild their homes, dealing with insurance claims can be aggravating. But even for those lucky enough to own an undamaged home in affected areas, average prices have declined by 10%. Additionally, new flood maps are requiring buildings to be updated and raised, lest owners face dramatically higher flood-insurance costs in a few years. As the New York Daily News reports, those who don’t comply with new building codes “can expect to pay a steep cost with insurance premiums around $9,500 a year … compared with $1,410 a year for a homeowner whose house is built at the recommended level.” And this means that more money will be paid to cover flood probabilities instead of going to savings, retirement funds, or other goods and services.

Insurance company losses
Even if Hurricane Sandy was a coast away, your insurance company investments might have been damaged. The Allstate Corporation (NYSE:ALL) reported fourth-quarter net income of $394 million, 45% lower than in last year’s fourth quarter. Its fourth-quarter operating income came in 60% lower than last year’s, as the company predicted it suffered losses of more than $1.1 billion owing to Sandy. Travelers Companies Inc (NYSE:TRV)‘s fourth quarter was equally subdued, with a decline in both operating and net income of more than 50% and pre-tax losses owing to Sandy of more than $1 billion. And The Chubb Corporation (NYSE:CB) reported a 75% decline in net income, with $882 million in Sandy losses accounting for more than $2 lost in earnings per share. Without Sandy, and with a constant price-to-earnings ratio, The Chubb Corporation (NYSE:CB)’s share price would be more than 30% higher.

Plenty of costs, very few benefits
These are only a few of the economic costs, and they still fail to consider the storm’s toll on human welfare. While some money was put into gas-fueled generators, wood, and other goods that helped people weather the storm and rebuild, the net effect on the economy is not positive.

The article The Economic Aftershocks of Hurricane Sandy originally appeared on Fool.com.

Fool contributor Dan Newman has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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