Irma: too early to see an effect on rates
The market needs to be cautious about what the full impact of hurricanes Harvey and Irma will be, in terms of both what the final losses might be and how these may impact rates, according to Patrick Haveron, president of Maiden Re.
Haveron told Monte Carlo Today that it was still early days for the full impact of the two storms, but he stressed that Maiden Re had a non-catastrophe orientated business model. While it expects some losses from the storms, they should be within a manageable range.
“While Maiden is not a property cat reinsurer, it carefully manages its occurrence and aggregate exposure to mitigate its losses in catastrophic events. Maiden will experience some loss activity from these events, but we believe it will be contained well within our published occurrence and aggregate exposure risk tolerances,” Haveron said.
He added that it was too early to say whether rates across the industry would go up as a result of the storms but there could be something of an upwards bias when it came to the arc of estimates.
There was also a chance that some of the industry loss estimates could be on the low side and that they might increase as more information comes in.
“It is too early to know whether rates will respond,” he commented. “Is it the game-changer that such a storm could have been? The first indications suggest it is not, but I do think it could add some firmness to the catastrophe rate environment.
“The thing that we particularly don’t know is what segments of the market will be most impacted. Is it in traditional markets, both global and US? Is it in the ILS markets? A number of observers certainly think it will impact those markets at this point. Will there be any additional firmness beyond the catastrophe markets? It’s too early to tell.”
Haveron concluded by saying that no matter what is the final outcome of the storms, Maiden Re is well positioned within the market.
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