International Insurers to Cover an Estimated 50 Percent of Hurricane Sandy Losses
Estimated losses from Hurricane Sandy currently stand at over $16 billion (as reported by publicly traded companies) but are anticipated to reach $20 billion. Regardless of the final totals, international insurance companies are expected to cover roughly 50 percent of losses, estimated today at more than $8 billion and potentially reaching an estimated $10 billion. In response, Brad Kading, President and Executive Director of the Association of Bermuda Insurers and Reinsurers (ABIR), issued the following statement during today's Insurance Regulation Forum in New York:
“Hurricane Sandy underscores the important role that international reinsurers play in times of crisis. Global reinsurers are financially strong and have substantial capacity to support US insurance companies as they review their portfolios in light of claims. In fact, Bermuda's reinsurers are the largest suppliers of catastrophe reinsurance to US insurers and have an excellent record of claims payment. With the potential losses from extreme weather on the rise, the need for global reinsurance will continue to expand. A recent report by the catastrophe risk management firm Karen Clark & Company, based on an analysis of more than a century of hurricanes, warns that the United States can expect insured losses of at least an average of $10 billion from a hurricane every four years. Simply put, the less insurance capacity we have to remedy the damage from these storms, the higher the costs will be for US consumers.
Given Bermuda's location in hurricane alley, we sympathize with the residents of the East Coast who continue the rebuild from the devastation left by Hurricane Sandy. As we reflect on the disastrous events of last year and anticipate future catastrophes, it is clear that the nation needs a robust insurance market that is open to as many competitors as possible and encourages direct foreign investment. If perceptions of risk increase, or consumer demand is amplified, international reinsurers are ready to meet the market's needs.”
About ABIR: The Association of Bermuda Insurers and Reinsurers (ABIR) represent 22 international insurers and reinsurers. With headquarters and operations in Bermuda and with operating subsidiaries in the United States and Europe, these carriers derive business income from over 100 countries around the world. ABIR's mission is to represent the public policy interests of Bermuda's Class 4 insurers and reinsurers around the world, giving special priority to regulatory action in Bermuda, Europe, US and international regulatory forums; and to promote Bermuda's Class 4 reinsurers as the best in the business in ceding insurer forums. For more information, please visit: www.abir.bm.
Emily Flynn Pappas, 202-379-5219