Tim Edwards, EMEA head of catastrophe analysis at TigerRisk, discusses the impact of Hurricane Ian and how (re)insurers can best prepare for more frequent and severe weather events.
What does the impact of Hurricane Ian mean for reinsurers?
At an individual firm level, it depends. Many top global reinsurers changed strategy over the past few months with half seemingly raising natural catastrophe appetite, given the more favourable rating environment, while others made reductions due to ongoing concerns over pricing adequacy and the impact nat cat volatility was having on earnings. As the second-largest catastrophe event in 20 years behind Katrina, Hurricane Ian will test those two different strategies given the multiple headwinds the market also sees at present.
Based on a market-wide loss forecast of $50bn-$60bn, the event represents a significant hit to many (re)insurers’ earnings. Although the bulk of storm losses will be in residential property, commercial property losses will also be substantial and exacerbated by flood damage, making the current loss projections uncertain given the time required to settle flood claims.