THIS BLOG IS CLOSED AND INSURANCELINKED'S COVERAGE OF THE @)!& HURRICANE SEASON CONTINUES HERE.
The leaders of the global reinsurance industry spend months each year preparing for September's conference in Monte Carlo. But this year's presentations have had to be rewritten over the weekend as it became clear that the implications of Harvey and Irma would be dominating the agenda. This blog takes over from the Harvey and Irma live blog and will continue to follow how the industry responds to events in the Atlantic.
Chart from Lloyd’s.
AM Best have summarised the cat bonds that are exposed in Florida.
Estimates of economic losses from Moody’s Analytics. Note that Harvey now looks worse than Irma.
Dirk Lohmann, CEO, Secquaero commented on the potential for trapped capital:
Irma will probably have some impact on pricing but we’re not talking about a sea change. If it had hit Miami as it was forecast to do on Friday and come near the $100bn mark it would have had a much more pronounced impact on pricing.
It will have an impact on retrocession because a large proportion of that is in the ILS market. You’re going to see a lot of collateral that’s going to be trapped through the buffer clauses, you had those loadings. Even if you didn’t impair the upper end of the program you may have collateral tied up. So in order to renew you need to raise fresh money.
Irma’s cumulative wind field footprint from the RMS blog. The highest winds were limited to the Keys and the south western tip of the state.
The share price of publicly traded, Florida focused insurers has recovered.
Pepper the Scor lounge robot…
NASA’s Dr Tim Hall has run some numbers to show just how unusual it is to experience two cat 4+ hurricanes making landfall in the US within 15 days in this article for InsuranceLinked: 2017 hurricane odds
Guy Carpenter’ Des Potter, Head of GC Securities, EMEA commented on London’s new ILS framework:
“London’s ILS framework will be vital in enhancing the City’s standing in the global reinsurance market. The big challenge is whether the U.K. regulator can provide the speed and certainty required to enable the U.K. to compete effectively with other ILS jurisdictions. The U.K. has a strong global reputation, but as the ILS market evolves, the regulator will need to be far more responsive than it is today,” Potter warns.
“After the next major property catastrophe loss event, reinsurers will almost certainly turn to the ILS market for recapitalisation. Right now, London’s infrastructure is not efficient enough to allow capital to be deployed quickly or cost effectively,” he explains.
He adds, “If there were another Katrina tomorrow, it would take the U.K. many months to approve plans for capital to flow in, in which time Bermuda would have raised billions. London’s market share could drop materially within a few weeks of such an event.”
The recent U.S. hurricanes are more likely to be earnings events than capital events, according to reinsurance industry experts in a report published today by S&P Global Ratings
AccuWeather predicts economic cost of Harvey, Irma to be $290 billion
AccuWeather Global Headquarters – September 10, 2017 – AccuWeather reports aIt has been a destructive and costly hurricane season, following the historic impacts from Hurricane Harvey and now Hurricane Irma.
This is the first time in the history of record keeping that two Category 4 or higher hurricanes, Harvey and Irma, have struck the U.S. mainland in the same year.
“That is extraordinary by itself,” Dr. Joel N. Myers, AccuWeather founder, president and chairman, said.
“And also unprecedented is that this particular storm, Irma, has sustained intensity for the longest period of time of any hurricane or typhoon in any ocean of the world since the satellite era began,” Myers said.
According to S&P, equity valuations have been rising despite falling returns.
It’s much quieter than usual for a Sunday of the conference. Many underwriters seem to have decided to stay at their desks – particularly those coming from Bermuda.
Posted: Monday, September 11th, 2017