Hurricane Ida complexity may drive loss creep: PCS interview

For our latest Artemis Live video interview we wanted to understand how the industry loss from Hurricane Ida has been developing and explore the complexities in the reconstruction and recovery that could impact just how high the insurance and reinsurance market loss could rise.

Who better to do that with, than executives from Property Claim Services (PCS), a division of Verisk, so we were joined by Tom Johansmeyer, Head of PCS and Ted Gregory, Director of Operations, PCS and ISO Claims Analytics for this video interview.

Hurricane Ida has already had a significant impact on insurance and reinsurance markets, with the insurance-linked securities (ILS) market also taking its share of the industry loss.

The ramifications of this major catastrophe loss have also been acutely felt in the retrocession market, as Hurricane Ida drove significant losses to some collateralized and traditional retro reinsurance writers, aggregated on top of another heavy global industry catastrophe loss year.

Estimates for the industry loss from Hurricane Ida still range from as low as $25 billion to as high as $40 billion, sometimes above, so it’s clear at this stage there is no consensus.

In order for the market to really understand what’s going on, it’s important to look at the facts on the ground and the claims data flowing through the market from underwriting companies.

Hence, our discussion with PCS in this interview hopes to provide some more detail on what’s being seen on the ground in Louisiana, as well as further afield and how that will potentially influence the continued development of losses from Hurricane Ida.

Johansmeyer and Gregory gave us their views on how Hurricane Ida has developed so far, what the PCS team learned from a visit to Louisiana to survey some of the damage, how commercial losses remain a big unknown, what contribution the northeast will have, and importantly how a still developing Hurricane Ida loss will play into the end of year reinsurance renewals and appetites to buy retro hedging products like industry loss warrants (ILW’s).

Uncertainty remains high. The more insight into the damage caused by Hurricane Ida and how that is affecting the insurance and reinsurance market that is gained, the more the complexity of the event becomes clear and signals the potential for loss creep and amplification to emerge.

Watch this video interview to understand where these uncertainties lie and to gain useful tips on what reinsurance and ILS underwriters need to be looking out for, for potential loss development in their exposed positions and portfolios.

The full video interview is embedded below and can also be viewed in full, along with previous Artemis Live video interviews, over on our YouTube channel.

You can also listen in audio to our interviews by subscribing to the Artemis Live podcast here.

All of our Artemis Live video interviews have a focus on reinsurance, ILS and the efficiency of risk transfer and can be accessed directly from our YouTube Channel.

You can also listen in audio to these interviews by subscribing to the Artemis Live podcast here.

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