Int’l reinsurers suffer significant losses due to powerful 2017 hurricanes
PORT OF SPAIN, Trinidad (CMC) — The trail of death and destruction left across the region following the passage of hurricanes Harvey, Irma and Maria, have had a devastating impact on the financial results of international reinsurers.
According to the Association of Trinidad and Tobago Insurance Companies (ATTIC), local insurers should anticipate being faced with significantly higher reinsurance cost which will in turn have an impact on local market rates.
In a statement issued on Monday, ATTIC noted that most of the reinsurers are major providers of protection in the Caribbean and based on the significant financial losses attributed to the hurricanes as well as earthquakes in Mexico, leading international experts have indicated that there will be a global increase in premium rates and not just for loss-affected territories.
One company, Munich Re — the world’s largest reinsurer, recently reported overall losses of US$3.8 billion for the third quarter from the hurricanes and other natural catastrophes.
The three hurricanes made up the bulk of the losses for the quarter, with losses expected to be US$3.2 billion.
The global reinsurer posted a loss of US$1.65 billion for the period, July to September 2017, and further noted that recent catastrophe losses will jeopardise its profit target for 2017.
Swiss Re the world’s second largest reinsurer also reported losses of US$3.6 billion, and realised a net loss of US$468 million for the first nine months of 2017.
Another top-five reinsurer, Scor reported overall losses of US$310 million for the same period, with combined losses of US$696.0 million.
“Leading international experts anticipate that with the level of declared losses against reinsurers’ capital, we can expect premium prices within the Caribbean to increase,” ATTIC noted. “Additionally, like other companies, the industry is also faced with the difficulties of accessing foreign exchange to settle reinsurance obligations, which if not adequately addressed may adversely impact some local players ability to provide coverage as well as local premium rates.”
