Insurance providers suffer huge hurricane losses
The trail of death and destruction left across the Caribbean following the passage of Hurricanes Harvey, Irma and Maria in September, have had a devastating impact on the financial status of international reinsurers.
According to the Association of Trinidad and Tobago Insurance Companies (ATTIC), most of the reinsurers are major providers of protection in the Caribbean.
In a statement issued on Monday, ATTIC indicated based on the significant financial losses attributed to the hurricanes, plus earthquakes in Mexico, leading international experts have predicted there will be an increase in premium rates globally, and not just for loss-affected territories.
One company, Munich Re. – the world’s largest reinsurer, recently reported overall losses of US$3.8 billion for the third quarter from the hurricanes and other natural catastrophes.
The three hurricanes made up the bulk of the losses for the quarter, with losses estimated at US$3.2 billion.
The global reinsurer posted a loss of US$1.65 billion for the period, July to September 2017, and further noted that recent catastrophe losses will jeopardize its profit target for 2017.
Swiss Re the world’s second largest reinsurer also reported losses of US$3.6 billion, and realized a net loss of US$468 million for the first nine months of 2017.
Another top five reinsurer, Scor, reported overall losses of US$310 million for the same period, with combined losses of US$696.0 million.
Premium rates could increase in the Caribbean
“Leading international experts anticipate that with the level of declared losses against reinsurers’ capital, we can expect premium prices within the Caribbean to increase,” ATTIC noted.
The association also says local insurers should also anticipate being faced with significantly higher reinsurance cost which will have an impact on local market rates.
“Additionally, like other companies, the industry is also faced with the difficulties of accessing foreign exchange to settle reinsurance obligations, which if not adequately addressed may adversely impact some local players ability to provide coverage as well as local premium rates.”
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