Significant Dorian losses to extend cat reinsurance rate rises into 2020, says KBW
As the path of hurricane Dorian shifts, the National Hurricane Center (NHC) now projects that the storm will make landfall in Jupiter (slightly north of West Palm Beach), reaching category 4 strength, and bringing heavy rain, storm surge, and 130 mph winds, all of which are expected to cause sizable losses.
Analysts from Keefe, Bruyette & Woods (KBW) said that with the generally low Florida primary insurer retentions and increased year to date (YTD) reinsurance purchases “we think a major Florida catastrophe event will significantly impact the reinsurers; domestic primary insurers remain exposed up to their reinsurance attachment points”.
KBW added that “YTD loss creep and potentially significant Dorian losses means that catastrophe reinsurance rate increases and elevated reinsurance demand will persist into 2020”.
They said: “We expect Outperform rated RNR and AXS to benefit from likely increasing reinsurance rates, despite the presumed (but not yet quantifiable) hit to book value from Dorian - and any subsequent - catastrophe losses.”
Get all the latest re/insurance industry news with our daily newsletter - sign up here.
Swiss Re reclaims top reinsurer spot in a tough year, data reveals
Telematics specialist secures £40m to develop data-driven solutions for insurance market
Large general insurer in UK reports fraud savings hike in H1 2019
CNO Financial hires new chief actuary from New York Life
Prudential Financial reshuffles US business leadership in growth drive
Feature: 10 ways insurers are using insurtech to drive new business
