Bermuda re/insurers to pick up at least 25% of $100bn nat cat loss
Bermuda’s re/insurers are expected to fund a quarter or more of approximately $100 billion in aggregate insured losses from the recent nat cat events, according to preliminary estimates from the Association of Bermuda Insurers & Reinsurers (ABIR).
The claims relate to last month’s ‘record-setting’ hurricanes Harvey, Irma and Maria, and Bermuda’s re/insurers have already begun to pay claims, ABIR said in an Oct. 10 statement.
Bermuda-based commercial carriers represent the second-largest insurance hub outside London and are the leading providers of catastrophe reinsurance in the world, according to the organisation.
“At this time, we are helping in the best way we can—by forwarding billions of dollars to help begin and sustain recovery in Texas, Florida, Puerto Rico, the US Virgin Islands and the rest of the affected Caribbean and Southeast US,” said Kevin O’Donnell, ABIR chair and CEO of RenaissanceRe Holdings.
“Going forward, we are committed to helping our clients and their communities rebuild more resiliently, and supporting continued innovation to help close the insurance protection gap,” O’Donnell added.
“By diversifying the financial risks of these disasters to a willing global private market, we can best reduce financial burdens on exposed communities, taxpayers and policyholders.”
The Bermuda share of hurricane losses will be aggregated from business segments including commercial insurers and reinsurers; captive, or self-insurance companies; catastrophe-focused managing general agents (MGAs); and alternative capital risk funds and pools.
Bermuda’s global insurance groups hold market-leading positions and expertise in business segments ranging from property insurance and catastrophe reinsurance, to energy and excess liability, according to the statement. Since 2000, the market has contributed more than $50 billion towards US catastrophe losses, including 10 percent of the World Trade Center attack claims and a third of liabilities incurred during 2005’s Hurricane Katrina, the deadliest and costliest hurricane recorded to date, according to the National Hurricane Center, and hurricanes Rita and Wilma.
With operating subsidiaries in the US and Europe, and business in more than 150 countries, ABIR’s member companies wrote combined global gross written premium of $92 billion on a capital base of $124 billion at year-end 2016. They also provide more than a third of the capacity for Lloyd’s of London, and employ tens of thousands of people around the world, including more than 26,000 employees in the US, over 1,600 in Bermuda, more than 10,000 in Europe, and nearly 8,100 in Asia and Oceania.
Bermuda’s reinsurance market was launched in the mid-1980s when the world’s first excess liability carriers were established by Fortune 500 companies to fill an acute capacity crunch.
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