EQECAT: Re/Insurers ‘Face Record Losses’

May 24, 2011

florida hurricaneBermuda re/insurers are bracing for record losses this year as the global industry contends with devastating tornadoes, floods, earthquakes and what’s feared will be an active Atlantic hurricane season.

The Reuter news agency reports today [May 24] global re/insurers could suffer as much as $10 billion from weather-related losses in the United States alone in 2011 — up from the average of $2 billion to $4 billion,

According to EQECAT Inc, which provides disaster and risk models, reinsurers are also reeling from international cataclysm, including the earthquakes in Japan and New Zealand which caused billions of dollars in insured losses.

“This is not a black swan year that is an absolute worst case, but it is significant and it is close to that,” said Jose Miranda, director of client advocacy at EQECAT Inc, which provides disaster and risk models to re/insurance companies.

Globally — including the Japanese and New Zealand quakes as well as floods and a cyclone in Australia — US and overseas re/insurers could post up to $55 billion in losses, EQECAT projects.

Industry analysts Keefe, Bruyette & Woods have already said catastrophes in the first quarter of 2011 alone could cost the Bermuda firms almost $6 billion.

Mr. Miranda told Reuter re/insurers avoided large losses last year, despite a record number of Atlantic hurricanes, because none made landfall in the US — a lucky break that is unlikely to be repeated.

“Chances of that happening again are definitely slim,” he added.

Read More About

Category: All, Business

.