Global insurer and reinsurer, Hiscox, has lowered its loss estimate for hurricanes Harvey, Irma, and Maria, and says the events have led to rate increases of between 10% and 50%, and sometimes more, in loss-affected and loss-exposed U.S. property lines.
With third-quarter catastrophe events estimated to have cost the industry $100 billion, Hiscox has said, in a recent interim management statement, that it’s unsurprising to see signs of a hardening marketplace, after years of rate declines.
In loss-affected and loss-exposed U.S. property lines of business the re/insurer is seeing increases of up to 50%, “and sometimes more.” For reinsurance business at the upcoming renewals, Hiscox expects to see double-digit rate increases for U.S. catastrophe-exposed business, with the highest increases occurring on loss-affected accounts and retrocession business.
“In other London Market insurance lines, momentum is building ahead of the busy renewal season and reductions are coming to an end,” said Hiscox.
Previously, Hiscox had provided a loss estimate of $225 million for the impacts of hurricanes Harvey and Irma, and has now revealed that this estimate was prudent, and maintains its $225 million estimate, but which now includes hurricane Maria as well.
The re/insurer explained that this is based on an industry loss of $25 billion for Harvey (excluding the National Flood Insurance Program), a $35 billion loss for Irma, and a $30 billion loss for Maria.
“Claims arising from the Mexico earthquakes and California wildfires are not expected to be material for the Group,” said Hiscox.
Hiscox Group Chief Executive Officer (CEO), Bronek Masojada, commented; “2017 is turning out to be an historic year for catastrophes and Hiscox’s first priority is to help our customers get back on their feet. Our long-held strategy of balance and diversity was built for this environment, as our retail businesses provide stability when volatility impacts the big-ticket areas. Our balance sheet is strong, and we are in a good position to capitalise on changes in the market.”