Hurricane Ian won't likely submerge any reinsurance towers: KBRA
Hurricane Ian is unlikely to shoot past the upper limits of most reinsurance programmes for primary insurers with Florida exposure, analysts at the KBRA ratings agency have said.
“Gross losses so far will remain well within the upper limits of most individual company reinsurance programmes,” analysts wrote.
Primary carriers rated by KBRA all “have appropriate cat reinsurance coverage in place and we are not aware of any instances where losses are expected to exceed the top layers of coverage.”
Every company with material exposure to Ian is expected to take a full retention loss and, in many cases, up to the same amount in reinstatement premium, analysts added.
Additionally, primaries will pay more for January and mid-year 2023 renewals, KBRA noted.
“The negative impacts from Ian may further constrain capacity and contribute to further increases in prices to the detriment of reinsurance purchasers looking to reduce retentions and buy more coverage at the top of their cat towers,” KBRA said.
Reinsurance coverage forecasts were built on a wide-ranging array of loss estimates ranging from the low-end forecast from CoreLogic at $31 billion (range $31 to 53 billion) to the high end $74 billion from RMS (range $53 to 74 billion), albeit amid notable differences in measurement scope.
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