Advertise here, Reinsurance News

Menu

Reinsurance News

Impact of Indonesian tsunami on local, global re/insurers to be minor: Fitch

10th January 2019 - Author: Charlie Wood

The recent tsunami to hit Indonesia following the Anak Krakatau volcanic eruption in the closing days of 2018 is not likely to affect the financial stability of the country’s insurers due to comprehensive catastrophe risk management and strong capital buffers, according to Fitch Ratings.

Indonesia tsunami

Credit: The Jakarta Post/Dhoni Setiawan

It’s also likely that specialist reinsurers in the region, as well as the largest global players, will absorb their ~$1.1 billion share of losses.

Fitch Ratings says Lesung beach, Panimbang and Carita beach accounted for most of the insurance losses.

An underwater landslide on 22 December 2018 after the Anak Krakatau eruption triggered the tsunami around the Sunda Strait’s coastal areas, with homes, hotels, public buildings and fishing boats among the hardest hit.

Fitch Ratings adds that, while insurers have strong capital buffers, indicated by the average of the rated insurers’ risk-based capital of above 200% at the end of September, the rising frequency of catastrophe losses is likely to result in more disciplined underwriting to improve risk management.

Fitch says that insurers also need to re-calibrate their catastrophe reinsurance coverage amid increased frequency of disasters during the reinsurance coverage period.

In addition, the recent tsunami adds to a series of natural disasters that affected the country in 2018, including an earthquake in Lombok and a tsunami in Palu, which may increase insurance claims and lower the insurers’ profitability for 2018, Fitch says.

Recent Reinsurance News

Getting your daily reinsurance news from Reinsurance News is a simple way to receive only the reinsurance industry news that matters, delivered directly to your email inbox.

  • Only email is mandatory, but the more you tell us about yourself the better we can serve you in future!
  • This field is for validation purposes and should be left unchanged.

By submitting the form you are giving your consent to be emailed by us.

Read previous article:
Argo Group renews Harambee Re sidecar for sixth time

Specialty re/insurer Argo Group International has announced the renewal of its Harambee Re sidecar for 2019, the sixth time since...

Close