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Munich Re, HDI, Everest Re, Lloyd’s most exposed to Puerto Rico hurricane loss: KBW

27th September 2017 - Author: Steve Evans

Analysts at Keefe, Bruyette & Woods (KBW) have provided an updated list of the reinsurers they deem likely to take the biggest share of the losses from hurricane Maria’s devastating impact on Puerto Rico.

hurricane-maria-puerto-ricoTop of the list of those assuming risk from insurers operating in Puerto Rico is global reinsurance giant Munich Re, which KBW said has a 13.7% market share.

Next down the list is HDI Global SE, with an 8% market share, reinsurance firm Everest Re with 7%, Fairfax with 6.1%, Alleghany with 5.8%, Swiss Re with 5.3%, XL Group with 5.2%, Anglo Holdings LLC with 4.4%, Aspen at 4.1% and MAPFRE with 3.8%.

Other notable firms include reinsurer SCOR with a 3.3% market share, Chubb at 2.9%, Liberty Mutual at 2.8%, QBE at 2.4%, MS&AD at 1.9%, Sompo at 1.5%, Berkshire Hathaway at 1.4%, AXIS also at 1.4% and RenaissanceRe at just 0.8%.

KBW breaks out all the Lloyd’s of London syndicates and attributes their losses back to the parent company, but if you roll them all up it looks as if the Lloyd’s market could have a market share of over 8% or higher, which would put it as at least the third most exposed to hurricane Maria losses in Puerto Rico.

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Catastrophe risk modelling firm AIR Worldwide estimated that of the total hurricane Maria insured industry loss, estimated as $40 billion to $85 billion, Puerto Rico alone could account for 85% of this, so $34 billion to $72.25 billion.

That’s a huge bill, of which a significant sum is expected to fall to the reinsurance market, with those named above all set to take a share.

Munich Re, with its estimated 13.7% market share could face a huge loss just from hurricane Maria’s Puerto Rico impacts it seems, if the estimate from AIR is near accurate and the market share figure close to the truth.

But even if Munich Re’s market share was only 10% and hurricane Maria’s industry impact in Puerto Rico just $34 billion, the lowest end of AIR’s range, the reinsurer could still face a loss in the billions, as it’s considered feasible by sources that as much as 65% of the loss could fall to reinsurance in this case.

It’s going to be interesting to see what disclosures are made by the reinsurers exposed to hurricane Maria’s impact on Puerto Rico. This latest hurricane could definitely be the difference between the 2017 season being an earnings or capital event.

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