Insurance stocks are rallying as Hurricane Matthew bears down on Florida

Shares of insurance companies that are exposed to Florida are rallying on Friday, as Hurricane Matthew has yet to make landfall.

The stocks are declines on Thursday that happened as the storm headed towards the southeastern United States coast from the Caribbean.

Shares of United Insurance Holdings gained 10%, Federated National Holding rose 8%, and Universal Insurance Holdings climbed 17% in mid-morning trading in New York.

The National Hurricane Center on Friday reported that Matthew is a Category 3 storm with maximum sustained winds of 120 miles per hour, down from the Category 4 level that comes with winds moving at 140 mph.

But some parts of Florida remain under evacuation orders. President Barack Obama on Thursday declared a state of emergency for Georgia, Florida, and South Carolina.

Still, insurers are projected to take on large losses because of the storm.

Although Matthew's path is uncertain, insurance companies tracked by Bloomberg Intelligence could report higher catastrophe losses in the second half of the year than the $2.2 billion erased during the same period in 2015, analysts said in a report Friday.

But the storm may not do as much damage to the overall US economy as previously thought. Matthew could cost the economy $7 billion, according to data from Kinetic Analysis cited by Bloomberg on Friday.

That's way down from Thursday's forecast of a $41 billion economic loss.

This chart shows some of the moves lower on Thursday and the rebounds on Friday: