Irma wake-up call will propel rates in right direction: Markel
Markel will provide a robust and rapid response to its clients caught up in Hurricane Irma, according to Andrew Barnard, the company’s senior managing director, head of international property catastrophe and retro reinsurance.
Barnard told Monte Carlo Today that it was difficult to get an immediate idea of what losses will look like after such a complex and fast-moving event. But, he said, it will remind the industry that losses can be a lot worse.
“Miami was just grazed by Irma, so I hope that was a wake-up call for people in terms of the values involved. A direct hit there could have resulted in a much larger number than the one that might emerge from this,” Barnard said.
“Four days ago, some estimates were north of $80 billion, on the track that Irma was projected to be heading on. It will be interesting to see what the model error was. Did it take into account the dimensions of the storm, which was the size of France in some reports?”
Barnard thinks the event will lead to a hardening of the market. “The moment it was suggested it could be north of $50 billion there was a hardening of the market. We are now moving in the right direction at last.
“Whether the hardening will be just in the US or globally I couldn’t tell you—there are no data points yet. As a reinsurer, I’m always going to say globally, and as a broker I’m always going to say locally. Somewhere between those two is the truth.”
Barnard said upcoming renewals in areas such as Australia may represent a bellwether for what may happen in terms of rates. However, he stressed that Irma was still very much an ongoing event that could lead to further developments.
He believes the market will be responsible in its reaction to the hurricane. He underlined that Markel valued its long-term clients and that it was there to help them to replenish their capital.
“Our responsibility to the client is uppermost—it’s customer service,” Barnard said. “What’s complicating the issue is that we just don’t know yet how bad the damage from Irma will be.”
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