Hurricane Ian is now widely tipped to become one of the costliest US hurricanes ever with most insured loss estimates now reaching the $50 billion mark and some predictions suggesting they could be much higher.
In some of the most recent estimates, CoreLogic has suggested a potential loss of between $28 billion and $38 billion; AIR between $20 billion and $42 billion; S&P between $30 billion and $40 billion and RMS between $20 billion and $54 billion. Karen Clark & Company has issued this highest loss estimate so far of $63 billion.
While few captives will be directly hit by losses stemming from the event, it could have wider implications for the sector. These losses are expected to accentuate the hardening in the reinsurance markets, meaning captives that buy reinsurance will likely pay more.
Nevertheless, the industry and analysts have stressed that the losses should not remain within reinsurers’ catastrophe budgets. In an October 3 report by S&P Global called ‘Insured Losses From Hurricane Ian Will Likely Be Substantial But Manageable’ the rating agency said that would be the main question.
“Although it is still too early to fully quantify the insured losses from Hurricane Ian, it's clear that this is a major event for the sector. We believe global reinsurers will be significantly exposed to the damage caused by Hurricane Ian, but for this type of event, the question is whether the potential losses will remain within reinsurers' catastrophe budgets or annual earnings or whether they will create a capital event,” it said.
CoreLogic, AIR, S&P, RMS, Karen Clark & Company, Hurricane Ian, Losses, Catastrophe, Insurance, Reinsurance, North America