As reported yesterday,
Munich Re has sounded off about the possibility of its third quarter profits being wiped out by the recent hurricanes in the US. Now the Financial Times is saying this is just the beginning of a surge of bad news.
Citing Meyer Shields, analyst at Keefe, Bruyette & Woods, the report said reinsurers like Munich Re stand to lose more, compared to primary insurers.
With Florida being ‘heavily reinsured’, Shields noted: “50% to 75% of the losses will be borne by reinsurers. Every reinsurer will have significant losses.”
So it looks like Munich Re won’t be alone. According to the report,
Swiss Re, Hannover Re, Everest Re, Renaissance Re, Validus, and XL Group, as well as Lloyd’s of London insurers, are among the others to be hit.
As for primary insurers, Shields said that among those facing huge bills are Federated National and Universal Insurance Holdings. Providers of motor cover and even a not-for-profit insurer are also likely to pay significant amounts.
What’s interesting to note is the scope of cover, given the damage caused by Hurricanes Harvey and Irma. As the report stressed, wind damage is normally covered by home insurance in the US; the same cannot be said for flood damage.
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