Swiss Re Insurance-Linked Fund Management

Original Risk: A Society for Change Agents

Reported estimates of Sandy re/insured losses pass $17 billion: Fitch


Fitch Ratings has published a report looking at the total amount of reported insured and reinsured loss estimates for hurricane Sandy damage that have been announced by insurers and reinsurers since the storm struck the U.S. northeast back in October. Loss estimates have been coming in thick and fast through December and the total amount of reported losses to date is by Fitch’s reckoning over $17 billion. Fitch said they expect the total to reach $20 billion or more.

Fitch base their estimate of $20 billion or more on the loss estimates they’ve seen reported by insurers and reinsurers so far and their insight into who else is left to report estimates and how much the already reported numbers could creep upwards. Fitch note that their expectation is that the final insured industry loss toll will be towards the upper end of risk modellers estimates which peak at $25 billion.

Fitch said in the report that the complexity associated with a storm like hurricane Sandy and the uncertainty surrounding business interruption and flooding claims has made reporting estimates difficult for insurers and reinsurers. There are a number of major insurers yet to report a loss estimate and Fitch suggests that others will increase their estimates somewhat. Fitch said that the industry loss figure could jump by another $5 billion once these are all tallied.

Sandy has been an outsized loss event for auto and marine insurers who have taken large losses from the storm. Other than that the losses have tended to be incurred in commercial lines in greater proportions than personal lines. Primary insurers seem to have taken the lions share of the losses with reinsurers taking a reduced but meaningful share.

Fitch notes that Sandy demonstrated the favourable spread of loss and low concentration risk among insurers in the U.S. northeast, leading to losses being manageable for most. There were some incidences of areas where the risk models perhaps didn’t capture the full risk and companies may not have anticipated their exposure leading to some localised areas where companies became over exposed.

Fitch continues to state that it does not expect Sandy to be market changing and that Sandy helped to stabilise rates at the renewals, with some loss affected areas seeing upward rate movements. By Fitch’s reckoning Sandy could become the second most costly U.S. hurricane on record for the insurance and reinsurance industry.

We repeat here Fitch’s list of insurer and reinsurer reported minimum and maximum net loss estimates for hurricane Sandy, as of 4th January. You can access more insight and detail in Fitch’s report.

 Insurer or reinsurer Min estimate Max estimate
Lloyd’s $2,000 $2,500
American International Group $2,000 $2,000
Allstate Insurance Group $1,075 $1,075
Travelers Cos. Inc. $1,000 $1,000
SwissRe $900 $900
Chubb Corporation $880 $880
Zurich $758 $758
Munich Re $642 $642
ACE Ltd. $475 $475
QBE Insurance, Ltd. $350 $450
Alleghany Corp. $443 $443
Axis $375 $375
Hartford Fire Group $350 $350
XL $350 $350
USAA Group $334 $334
Validus $333 $333
NJ Manufacturers $300 $300
Everest Re $275 $275
Arch $170 $240
PartnerRe Ltd. $200 $240
Amlin PLC $230 $230
Assurant $200 $220
Aspen Insurance Holdings Limited $219 $219
Hanover $185 $215
Catlin Group Ltd. $200 $200
Tokio Marine $170 $170
Allied World $165 $165
Endurance $160 $160
MetLife Inc. $131 $146
Hiscox Ltd. $143 $143
RenaissanceRe $130 $130
Markel $75 $125
Alterra $90 $120
Montpelier Re Holdings Ltd. $95 $95
Tower Group Inc. $85 $95
Beazley (London) $90 $90
Progressive $90 $90
Lancashire $40 $60
Argo Group $45 $55
Selective $52 $52
W. R. Berkley Corp. $40 $50
Kemper $45 $45
Flagstone $39 $39
Platinum Underwriters Holdings Ltd. $38 $38
American Financial Group Inc. $25 $35
Cincinnati Financial $25 $35
HCC Insurance Holdings Inc. $30 $35
Maiden Holdings Ltd. $25 $35
United Fire Group Inc. $23 $35
Mercury General $20 $30
Novae Group Plc $25 $30
Navigators $18 $25
RLI Corp. $15 $20
American Safety Insurance $9 $11
Meadowbrook Insurance Group Inc. $5 $7
Total $16,187 $17,170


Here’s a reminder of the main insured loss estimates from risk modellers and PCS as they stand currently:

EQECAT at $10 billion to $20 billion

RMS at $20 billion to $25 billion

PCS initial estimate at $11 billion

AIR Worldwide at $16 billion to $22 billion

Reinsurance broker Holborn said Sandy could cost up to $30 billion

Swiss Re estimate Sandy’s industry loss at $20 billion to $25 billion

Munich Re said they expect Sandy to cost $25 billion

Register today for ILS NYC 2023, our next insurance-linked securities (ILS) market conference. Held in New York City, February 10th, 2023.

Artemis ILS NYC 2023 - Insurance-linked securities conference in New York City

Get a ticket soon to ensure you can attend. Secure your place at the event here!

Print Friendly, PDF & Email

Artemis Newsletters and Email Alerts

Receive a regular weekly email newsletter update containing all the top news stories, deals and event information

  • This field is for validation purposes and should be left unchanged.

Receive alert notifications by email for every article from Artemis as it gets published.