As insurers and reinsurers continue to assess the 2017 catastrophe events, the President and Chief Executive Officer (CEO) of Bermudian reinsurer RenaissanceRe, Kevin O’Donnell, has highlighted the uniqueness of the events, explaining that some losses have not emerged as expected.
Speaking during the firm’s first-quarter 2018 earnings call, O’Donnell provided some insight into the reinsurer’s ongoing assessments of 2017 cat events, including hurricanes Harvey, Irma, and Maria, as well as the northern and southern California wildfires.
With hurricane Harvey, O’Donnell said RenRe expected to see more risk losses than currently experienced within its other property business segment, but, “these risk losses have not emerged as expected and consequently we lowered our estimate.”
“Similarly, the anticipated commercial losses in Hurricane Maria haven’t materialized as quickly as expected,” he added.
However, O’Donnell stressed that given the size of hurricane Maria and its persistent impact on Puerto Rico, it remains too early to determine if slower-than-anticipated commercial loss development is indicative of lower actual losses.
“It is possible the losses just haven’t been reported yet due to conditions on the ground,” said O’Donnell.
Insurance and reinsurance industry-wide loss estimates from catastrophe risk specialists show that Puerto Rico is expected to assume the lion share of the loss, and it could be some time before the final economic and insured cost is fully-understood.
The loss developments of hurricane Irma and the California wildfires, however, are as expected, said RenRe’s President and CEO, highlighting the importance of the company’s extensive U.S. catastrophe experience and its proprietary loss estimation tools and loss development curves.
“More importantly, our years of experience estimating losses and settling claims provided us superior insight into the recent loss development in Hurricane Irma.
“For example, we were really not surprised by the large number of reopen claims insurers are experiencing with relatively high levels of loss adjustment expenses. This is a similar situation with the California wildfires. Once again, our experience and our proprietary tools and models provided us better insight into the potential impact of these events, consequently recognizing that the Northern California fires or a tail event were comfortably within our loss estimate,” said O’Donnell.
Bermuda-based RenRe certainly won’t be the only re/insurer continuing to assess loss development from 2017 catastrophe events, and it will be interesting to see if any surprises emerge in the months ahead for industry participants.
