Speaking to Reuters, David Cole, the Chief Financial Officer (CFO) of reinsurance giant Swiss Re, which reported a decline in Q1 net income today as a result of Cyclone Debbie, said the event was expected to impact regional reinsurance pricing.
“Debbie in itself may not have an impact that is so significant that it will have broad-reaching influence on global pricing. It certainly will have an influence on pricing in the affected market,” said Cole, in an interview with Reuters.
The reinsurance giant reported that its net income fell to $656 million in the first-quarter of 2017, driven largely by its $350 million hit from Cyclone Debbie.
The global reinsurance industry remains overcapitalised and highly competitive as traditional and alternative sources of capital continue to flood the marketplace. As a result, industry analysts and observers have questioned what type of event, and how large of an event might be needed to remove a substantial amount of capital and ultimately support a turn in global reinsurance pricing, which has been declining for some time now.
And, according to Swiss Re’s Cole, Cyclone Debbie, with an estimated insurance industry loss of $1.3 billion, will “certainly” affect regional reinsurance pricing, although it’s not expected that this will be felt across the global reinsurance industry.