The Buckingham Research Group is anticipating a “relatively choppy” catastrophe load for re/insurers in the first quarter of 2019 due to the impact of severe weather, winter weather and flooding.
Events like the March flooding in the Midwest U.S could generate economic losses of $4.25 billion, according to estimates from Aon, with re/insurers potentially absorbing more than $1 billion.
Flood losses in the U.S are generally covered under the National Flood Insurance Program (NFIP), but analysts noted that coverage issues almost always arise after such events.
Nevertheless, Buckingham Research Group is mostly modelling below average catastrophe estimates relative to the past 5 years.
Currently, the firm does not believe that crop insurance will be materially impacted as it awaits an update on late April planting conditions.
Reinsurance stocks also had a mixed quarter, under-performing in the beginning of 2019 due to fears of disappointing renewal rates at 1/1, but picking up towards the end of the quarter after more positive outlooks emerged for the 4/1 and 6/1 renewals.
Additionally, a survey by Buckingham Research Group found that the majority of companies it questioned were optimistic about the prospects of renewals rates at the June renewals.
