OLDWICK, N.J.--(BUSINESS WIRE)--As the U.S. property/casualty industry gets set for what is expected to be another active Atlantic hurricane season, events in the first four months of 2011 already are influencing insurers’ catastrophe management programs and, potentially, their operating results, according to A.M. Best’s Catastrophe Review.
The review is featured in this week’s BestWeek U.S./Canada. Global insured catastrophe losses from events in Australia, Japan and New Zealand during the first quarter of 2011 are estimated in the range of $35 billion to $50 billion, and claims continue to be evaluated, according to reinsurance brokers and catastrophe modeling firms. Losses from Cyclone Yasi and flooding in Australia, the Tohoku earthquake and tsunami in Japan, and the Christchurch earthquake in New Zealand have exceeded many reinsurers’ catastrophe budgets for all of 2011, and underwriting results are now under pressure. In the United States, a new version of Risk Management Solutions Inc.’s wind model has materially increased probable maximum loss estimates for a number of insurers, depending on the geographic locations of their property portfolios. These factors lead A.M. Best to expect that primary insurers could face higher reinsurance costs during the upcoming July 1 renewals as they evaluate the need for additional reinsurance protection.
Also featured in BestWeek is an A.M. Best Impairment study that shows eight companies have been added to the list of impaired insurers for 2010, since the last A.M. Best impairment study, which included impairments from 1977 through 2009. The eight impairments — one life/health and seven property/casualty companies — represent a decrease of five impairments compared with the prior year.
In addition, the A.M. Best P/C Financial Review shows the U.S. property/casualty industry continued to face significant hurdles throughout 2010, including competitive market conditions, weak macroeconomic factors, elevated catastrophe-related losses and low interest rates.
BestWeek is published by A.M. Best Co. for insurance professionals. To subscribe, visit http://www.ambest.com/sales/BestWeek.
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