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Catastrophe modelers, insurers and reinsurers are still sorting out the damage from Windstorm Xynthia in Europe and the earthquake in Chile. Taking only the highest of high-end estimates, the damage from these two catastrophes could exceed $12 billion, resulting in fairly steep property-catastrophe losses long before hurricane season begins. With three more major property reinsurance renewals remaining for the year -- at April 1, June 1 (Florida) and July 1 -- there is plenty of time for the impact of these events to be absorbed into reinsurance pricing.
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FeedAssessing the Tab for Q1 Catastrophes
Catastrophe Bond Market Hits Target, Records Possible in 2010
The end of a year means a rush of data from the insurance and reinsurance industries, as treaties are renewed for the coming year. Catastrophe bonds are a part of this annual orgy of data production, as a flurry of activity occurs in December, with the industry's commitment to this form of alternative property-catastrophe risk-transfer setting the tone for the year to come. The cat bond market isn't big enough to push reinsurance rates, but you can generally get a sense of what the coming year will look like for cat bonds based on pricing for traditional reinsurance.
Continue reading Catastrophe Bond Market Hits Target, Records Possible in 2010
Gustav's insured losses could reach $10 billion, fraction of Katrina's
The losses from Gustav are significant, but not nearly as bad as they could have been.
That's the early read regarding onshore / offshore property and infrastructure damaged caused by Hurricane Gustav, with losses pegged at $4 billion to $10 billion, according to estimates by Risk Management Solutions. In contrast, Hurricane Katrina in 2005 caused about $50 billion in damages.
Risk Management said losses from Gustav were lessened by the fact that the storm weakened, and hit the coastline as a Category 2 hurricane, and the fact that it came ashore about 70 miles southwest of New Orleans. Those factors, combined with better preparation by companies with vulnerable property in the area, will result in lower damages totals, Risk Management said.
However, RMS was quick to point out that the $4-10 billion damage total does not include loses from flooding in New Orleans that could occur in the days ahead.
Gustav: Little U.S. GDP impact
Economist David H. Wang, who runs U.S. GDP models each quarter, said Tuesday he expects "only a minimal U.S. GDP impact from Gustav."
"Of course human safety is the primary concern. But regarding regional GDP, the Southeast U.S. will incur a 0.1-0.3% GDP reduction in the third quarter from the hurricane, but the overall impact on U.S. GDP will be minimal," Wang said.
That's the early read regarding onshore / offshore property and infrastructure damaged caused by Hurricane Gustav, with losses pegged at $4 billion to $10 billion, according to estimates by Risk Management Solutions. In contrast, Hurricane Katrina in 2005 caused about $50 billion in damages.
Risk Management said losses from Gustav were lessened by the fact that the storm weakened, and hit the coastline as a Category 2 hurricane, and the fact that it came ashore about 70 miles southwest of New Orleans. Those factors, combined with better preparation by companies with vulnerable property in the area, will result in lower damages totals, Risk Management said.
However, RMS was quick to point out that the $4-10 billion damage total does not include loses from flooding in New Orleans that could occur in the days ahead.
Gustav: Little U.S. GDP impact
Economist David H. Wang, who runs U.S. GDP models each quarter, said Tuesday he expects "only a minimal U.S. GDP impact from Gustav."
"Of course human safety is the primary concern. But regarding regional GDP, the Southeast U.S. will incur a 0.1-0.3% GDP reduction in the third quarter from the hurricane, but the overall impact on U.S. GDP will be minimal," Wang said.
Continue reading Gustav's insured losses could reach $10 billion, fraction of Katrina's
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