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Hurricane Irma : rating agencies and reinsurers are anticipating the worst

by

Hubert Roy

8 September 2017, 15:00

Photo : NASA.

Hurricane Irma has not yet made landfall in the United States that the rating agencies and reinsurers to anticipate the worst in the wake of his passage.

A.M. Best has relayed a calculation made by Lloyd’s , which provides that the disaster will cost at least $ 131 billion (G$) to the insurance industry. For its part, AON reveals that the economic damage caused by Irma in the Caribbean may approach$100 billion.

On the side of Standard & Poor’s (S&P), it is anticipated that the damage will be far more expensive than those of hurricane Harvey, which has devastated the Texas, including Houston. In a report titled » No respite for reinsurers, the firm’s rating highlights that the capacity of reinsurers to take a blow, especially as we found a lot of liquidity in this market, from third party players that they are competing against.

«The regional awards become tighter. What will be the impact on a global scale? It remains to be determined, » says Hardeep Manku, credit analyst at S&P.

On the side of A. M. Best, it is expected that the compensation of the victims can lead to some complexities, some insurance contracts, with particular nuances in relation to the damage caused by the wind or to a beach. Not to mention the intricacies of the application of the national Flood Insurance Program, but also of the Florida Hurricane Catastrophe Fund.

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