PCI Reporter 2018 Day 1
Total Page:16
File Type:pdf, Size:1020Kb
PCI REPORTER DAY 1: SUNDAY OCTOBER 28 2018 Re/insurers looking forward with optimism The outlook for global re/insurance property risks, including risks that back towards a sustainable level. Contents rates ahead of the next round of were not affected by the 2017 losses. “In terms of reinsurance, we expect Random cyber- renewals is mixed, with some However, as we headed into the third non-proportional treaty prices to go attacks highlight exposures ............4 reinsurance executives expecting quarter of 2018, the rate of property up as they generally have in 2018; Flood insurance wholesale pricing improvements insurance increases were starting to and we expect proportional treaty on the cusp of while others anticipate pricing to drop,” said Jean-Paul Conoscente, commissions to continue to come reform .................4 improve in only certain lines. CEO of reinsurance for SCOR. down as they generally have last year “After the 2017 Harvey, Irma and “Our expectation after the Florence as well,” he added. Maria (HIM) and California Wildfire and Michael losses is that property “This year’s hurricane season was losses, property insurance rates insurance rates will continue to again far from being benign,” said were already generally increasing on move upwards again to bring prices Axel Freiboth, managing director North America at Hannover Re. Hurricane Michael: industry loss estimate to date “Michael made landfall at close to California waiting Firm Low High Notes Date Category 5 intensity, while Florence for the “Big One” .6 point point caused heavy flood losses on top of ILS market bastion RMS $6.8bn $10bn $250m to $750m of losses to the NFIP* and 19-Oct of stability ............8 the wind damage,” he added. $400m to $1.3bn of storm surge losses; Sedgwick looks to covers property damage and business “Especially concerning is the the future ............8 interruption across residential, commercial, tremendous increase in the intensity Hybrid solutions industrial, and automobile lines of business of some of these storms shortly before for facultative and AIR $6bn $10bn Wind and storm surge losses, including 15-Oct landfall. While Florence tempered treaty.................10 Worldwide property damage and additional living down, Michael and Willa quickly BMS veers away expenses but excluding marine losses and from the pack ....12 losses from precipitation-induced flooding; developed into very significant storms. Emerging risks on excludes NFIP “As insurers and reinsurers, we the radar ...........15 CoreLogic $3bn $5bn Includes residential and commercial storm 12-Oct stand to our promises to cover such Reactions Editorial surge and wind loss, as well as contents and devastating catastrophes. If we want Board ................16 business interruption. It compares with an to continue doing so amid a rising Booth lays out estimate released just prior to landfall of Darag’s US game $2bn to $4.5bn threat from natural hazards, we need plan ...................18 KCC $8bn Does not include NFIP losses, but accounts 11-Oct to have adequate rates and therefore for privately insured wind and storm surge increases are a necessity especially damage to residential, commercial, and in loss-affected lines,” Freiboth industrial properties and automobiles told Reactions. *National Flood Insurance Program. Source: Company reports and The Insurance Insider Continued on page 3 BRINGING OPPORTUNITY TO RISK ADAPTATION + OPPORTUNITY = GROWTH PCI REPORTER: SUNDAY OCTOBER 28 2018 www.reactionsnet.com | 1 Strengthening tomorrow Recent events have confirmed, now more than ever, the need for resilience. Resilience in our balance sheet. Resilience in our relationships and commitments. Resilience in the models that help us construct a clearer picture of the future. Resilience for today and the many tomorrows to come. How do you spell tomorrow? TMR. NEWS Hurricane Michael cat losses Q3 cat loss estimates Firm Cat loss (gross) Firm Cat loss Notes Universal £300m to $350m (net) National Security $10m to $15m Everest Re $240m Losses stemming largely from Hurricane Florence, California wildfires and HCI $6m to $18m typhoons Jebi and Trami, as well as flood losses in Japan Federated National $275m NatGen $35m Losses from Hurricane Florence and the August wildfires in California Firm Cat loss (gross) Chubb $450m Losses stemmed from more than 20 separate weather events, including Firm Cat loss (net) Hurricane Florence, a rain and hailstorm in Colorado, typhoons Mangkhut AIG $300m to $500m and Jebi and wildfires in California Universal $35m RenRe $155m Typhoon Jebi and Hurricane Florence accounting for the bulk of claims Federated National $23m* Allstate $625m The carrier said $177m of catastrophe losses were booked for the month of Progressive $120m September, pre-tax, which included a negative re-estimate of reserves for HCI <$2m prior reported catastrophe losses *borne by its Monarch National subsidiary. Cincinnati $120m The carrier said it expected losses from Hurricane Florence to make up Source: Company reports and The Insurance Insider Financial $92m of the estimated figure, including $7m in claims from its Cincinnati Re reinsurance division Continued from page 1 Swiss Re $1.1bn The estimated $1.1bn of natural catastrophe losses include a $500m hit from Steve Levy, executive vice president of Typhoon Jebi in Japan Munich Reinsurance America, and chief AIG $1.7bn Losses in Japan, mainly from Typhoons Jebi and Trami, are expected to hit AIG executive officer and president of its with $900m to $1bn in pre-tax cat losses. reinsurance division urged the market to Hurricane Florence and revised estimates from the California mudslides will account for approximately $600m to $700m of its losses maintain underwriting discipline. UPC $35m Included in the cat losses are insured claims from Hurricane Florence as well “This year’s events once again highlight as a new Q3 2018 loss and development on prior 2018 catastrophes the need for underwriting discipline and an Source: Company reports and The Insurance Insider adequate return on capital,” he said. “The necessity and urgency to be disciplined in insured losses estimated by AIR, will hit re/ individual firms’ balance sheets will of underwriting is increasing and will likely insurers’ fourth quarter results. AIG, one course vary. Florence was the cause of $50m create a positive impact on rates in the US.” of the first firms to announce preliminary in catastrophe losses for RenaissanceRe. Swiss Re’s view of the market remains loss estimates for Michael, expects to see SCOR expects to take a €50m ($56.9m) unchanged since the Rendez-Vous de an impact of up to $500m from the storm. hit from hurricane Florence, while its Septembre in Monte Carlo where group Universal, one of the largest property counterpart, Swiss Re, expects to take a chief underwriting officer of the firm, insurers in the state of Florida, is facing $120m hit from the storm. l Edouard Schmid, said: “We believe an gross losses and loss adjustment expenses inflection point in the pricing cycle for ranging from $300m to $350m from non-life insurance has been reached. Michael, with the majority of that amount Managing Editor Reactions: 3rd Floor, 41 Eastcheap, Christopher Munro London, EC3M 1DT, UK For 2019, we broadly expect stable rates, being ceded to the reinsurance market. +1 212 224 3473 Printing: Print-IT USA, Miami [email protected] provided no major event happens this year. Hurricane Willa, which made landfall Annual subscription rates: Editor Corporate multi-user rates are available, Andrew Putwain Underwriting margins in major non-life in Mexico in late October as a Category please contact +44 (0)20 7779 8789 [email protected] [email protected] insurance markets need to improve more 3 storm will also add to fourth-quarter Single user: £1,092 / $1,837.50 / €1,485 Senior Reporter Subscription hotline: to deliver sustainable returns on equity.” catastrophe losses, although the last powerful Heather Jimaa London: +44 (0)20 7779 8999 +44 (0)20 7779 8046 New York: +1 212 224 3570 In the US, insurers are currently tallying hurricane to strike in the same general [email protected] Back issues: US Reporter up their losses from Hurricane Florence, vicinity caused minimal insured losses. +44 (0)20 7779 8999 Michael Heusner Strengthening Subscribers: £27.50; +1 212 224 3479 with overall insured losses so far estimated Last year’s disasters did lead to overall Non-subscribers: £45.00 [email protected] ISSN 0953-5640 to be roughly $5bn by both AIR Worldwide rate hikes on a global scale, but not to the Contributing Editor Customer services: Garry Booth +44 (0)20 7779 8610 tomorrow and RMS. This is far below some worst-case extent that re/insurers had hoped. Property +44 (0)1986 874161 [email protected] Reactions is a member of the Audit scenarios which pegged the storm’s insured lines were particularly impacted following Bureau of Circulations. Reactions (ISSN Design & Production No. 002-263) is an online information Siobhan Brownlow Recent events have confirmed, now more than ever, the need losses at up to $20bn. According to S&P, 2017’s extensive wildfire, earthquake, and service supported by a print magazine Publisher published by Euromoney Institutional for resilience. Resilience in our balance sheet. Resilience in our the majority of losses from Florence will be hurricane losses in North America. Goran Pandzic Investor PLC. +1 212 224 3711 or +1 917 340 6197 ©Euromoney Institutional Investor relationships and commitments. Resilience in the models that retained by the primary market rather than As of the second quarter of this year, [email protected] PLC London 2018. Although Euromoney Institutional Investor PLC Business Development Manager has made every effort to ensure the help us construct a clearer picture of the future. Resilience for reinsurers. It also does not expect Florence global property insurance pricing increased Bill Schauer accuracy of this publication, neither +1 212 224 3485 it nor any contributor can accept any today and the many tomorrows to come.