Business

Insured losses from hurricanes, Mexico quakes US$95 bn — Swiss Re estimate

Wednesday, October 25, 2017

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ZURICH, Switzerland (AFP) — Total insured market losses from hurricanes Harvey, Irma and Maria and two earthquakes in Mexico this year came to around US$95 billion, reinsurance group Swiss Re announced over the weekend.

The Zurich-based company estimated its own pre-tax claims burdens — from three hurricanes and two quakes — at some US$3.6 billion (3.05 billion euros) in the third quarter.

The world's second largest reinsurer behind Munich Re based on assumed premiums cautioned that the estimates “are subject to a higher than usual degree of uncertainty and may need to be subsequently adjusted as the claims assessment process continues”.

“The most recent natural catastrophes have been extremely powerful,” CEO Christian Mumenthaler said in a statement.

Hurricane Harvey battered Texas and parts of Louisiana in late August, causing severe damage to property and paralysing the country's fourth-largest city, Houston, with major flooding.

In September, Hurricane Irma struck the Florida Keys archipelago and Hurricane Maria slammed into Puerto Rico.

Two powerful earthquakes hit Mexico in September, leaving hundreds of people dead.

“Swiss Re estimates the total insured market losses of the industry caused by these events to be approximately US$95 billion,” it said.

The group said that approximately US$175 million of its own claims burden, which is net of retrocession and before tax, was related to the quakes.

Chief Financial Officer David Cole, said: “Swiss Re maintains a very strong capital position and high financial flexibility to support our clients' needs, respond to market developments, and execute on our capital management priorities” despite the challenges posed by recent events.

Another Swiss group, Zurich Insurance, said Thursday it expects to receive around US$700 million in insurance claims net of tax related to hurricanes Harvey, Irma and Maria in the third quarter.

Sector number three Hannover Re said it expected premiums to rise in the wake of the recent spate of natural disasters as reinsurers underwrite large-scale liability risks, purchasing policies from multiple insurers to spread risk, share premiums, and limit total potential losses.

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