Argenta Holdings, the Lloyd’s service company, managing agent and syndicate owner, has predicted that Winter Storm Elliott in North America will have only a “limited impact” on the Lloyd’s syndicates market.
Source: Gov. Kathy Hochul/Twitter/AP
Reflecting on KCC’s insured loss estimate of $5.4 billion, Argenta says at this level primary carriers will generally not reach the attachment points of reinsurance.
There will undoubtedly be some exposure under binding authorities, written to local coverholders in both the homeowners and commercial markets, it added.
However, Lloyd’s market share in some of these states is relatively small.
Elliott brought frigid arctic air southward into the US over the Christmas period, plummeting temperatures to under 20°F below average across most of the Eastern US.
The storm caused significant damage across much of the country, even stretching northward into Canada and south over the Mexican border.
But while this was a very wide spreadsheet storm, impacting 42 US states, early data from modelling agencies suggests that this will not be a significant event for the reinsurance market, particularly when compared February 2021’s winter storm Uri.
Rather, KCC’s estimate of $5.4 billion would put Elliott more in line with the winter storms of 1983 and 1989, with 50% of the loss expected to fall to commercial insurers.
The main cause of the loss is thought to be burst pipes in both residential and commercial buildings from the freezing temperatures, which will drive significant disruption and impact to infrastructure.
