Reinsurance losses appear lower than feared
Hurricanes Harvey and Irma are more likely to be earnings events than capital events, according to reinsurance industry experts, as insured losses from Irma appear to be lower than had been feared.
Irma ripped through Florida on Sunday causing widespread wind damage and flooding.
Catastrophe-modelling company AIR Worldwide yesterday forecast total insured losses in the US of between $20 billion and $40 billion from the deadly storm. That was down from initial estimates over the weekend of as much as $65 billion.
Bermudian reinsurers’ stocks, which were battered for most of last week, recovered strongly yesterday. Aspen Insurance Holdings surged 9.4 per cent, Blue Capital Reinsurance Holdings gained 9.2 per cent, Validus Holdings 6.9 per cent, XL Catlin 5 per cent, RenaissanceRe 4.6 per cent and Everest Re 4.3 per cent.
Fitch Ratings analyst Brian Schneider said over the weekend that the hurricanes would not likely be a “market-changing event” and spark increases in reinsurance rates.
Experts in a round-table discussion at the reinsurance industry’s Rendezvous event in Monte Carlo this week said the losses do, however, have the potential to change risk perceptions and management behaviour.
David Flandro, head of global analytics at JLT Re, said he expected the losses to shore up the softening market — “soften the softening” — after prices dipped more than anticipated for June renewals.
Mr Flandro also noted that these storms will make the industry re-evaluate its ability to model such events, such was the unusual path Hurricane Harvey took.
Mike Krefta, chief executive officer of Bermudian-based Hiscox Re, said it was pointless to speculate on the levels of losses from the hurricanes at this stage.
“We need to ensure we find ways to proactively help the market after the event and help clients manage uncertainty going forward,” Mr Krefta added.
Mr Krefta said there are great opportunities for the market around the protection gap, human capital and technology.
North Shore restaurant in line for TV boost
Crash accused admits he was banned
House: Burt wants pardon for freedom fighter
Old containers used in Shelly Bay revamp
Jury clears crash driver
House: Boost for property owners
Take Our Poll