Goldman Sachs says that it saw an ‘active and nuanced’ global catastrophe quarter in the first three months of this year.
The firm said that it found that US-centric personal lines looked to be best positioned since there were well-below-average natural catastrophe losses in the same region.
Meanwhile, globally oriented commercial lines insurers face above-average international catastrophes in addition to varying degrees of exposure to the Russia-Ukraine conflict.
Goldman Sachs wrote: “Preliminary 1Q22 U.S. weather-related catastrophe loss estimates of $2bn+ (GS, Catastrophe Insight, RMS) are roughly 30% of the seasonal average – which was about $7bn ($5bn median) over the last 10 years. We note that the 2011-2020 1Q U.S. natural catastrophe average and median are a lower $5bn/$4bn, respectively, which excludes the 1Q21 U.S. catastrophes losses of $20bn ($15bn attributable to Winter Storm Uri), and makes our preliminary estimate a higher 50% of the 10-year median.”
They added: “Globally, we estimate roughly $12bn of insured losses, which is slightly more than average losses over the past decade, owing to $10bn of international losses, which is more than double the 10-year average and median of $4bn.”
The firm laid out several large natural catastrophe events that have impacted the industry since the beginning of the year, including the windstorms Dudley, Eunice, and Franklin in Europe in January; the recent earthquake in Japan; and the floods in Australia.
Goldman Sachs also noted that not all disclosed catastrophes in January and February, meaning that the losses did not exceed $150m in a month.
It concluded: “We expect an active quarter for man made losses headlined by exposures to the Russia-Ukraine conflict (discussed below). We also see at least $500m of cargo losses stemming from 1) a car carrier holding over $400m in cars that burned in the Atlantic, and 2) $140m from a fire in a Walmart in Indiana.”
