Reinsurance programmes in the U.S. could by threatened by sky-high losses as damages from early year heavy storms continue to aggregate, catastrophe risk modeller RMS has warned.
Striking results from early year weather report reviews show that tornado, hail and straight-line wind have more than doubled their averages for the last ten years, RMS reported.
RMS meteorologist Jeff Waters said National Oceanic and Atmospheric Administration’s (NOAA) Storm Prediction Center records show a particularly active severe weather season due to warmer-than-average ocean waters in the Gulf of Mexico; “Thus far U.S. severe weather events have caused significant property damage in many parts of the country, but losses have been within expectations of the (re)insurance market as a whole.”
But Waters issued a warning to insurers and reinsurers, advising carriers to carefully monitor the severe weather activity as it culminates throughout the year, saying aggregate impacts “could pose a more material threat to respective catastrophe budgets and reinsurance programs.”
Winter sea surface temperatures have been their warmest on record since 1981 and costs to re/insurers are snowballing as damage assessments and claims continue to pour in.
RMS said a clearer picture of the damage and cost extent will emerge in the coming days.