hurricane Irma 2017

Updated – 21:00 UTC September 8th: Major category 5 Hurricane Irma, which became the second strongest storm in history in the Atlantic, has battered the Leeward Islands of the Caribbean leaving a trail of destruction, as it continues on its route towards Florida still packing 155 mph winds.

The fixed and multi-year pricing of its catastrophe bonds acts as an effective hedge against future reinsurance rate rises, according to Heritage Insurance CEO Bruce Lucas, something that is especially pertinent as major hurricane Irma tracks towards the United States.

Reflecting just how well capitalised the reinsurance industry is, analysts at Morgan Stanley said today that they believe that even the aggregate industry losses from hurricane Irma and hurricane Harvey combined could still only be an earnings event for the sector, rather than a capital event.

A number of secondary catastrophe bond trades were seen as major hurricane Irma intensified on track towards the United States, possibly Florida, with the Citrus Re Ltd. (Series 2017-1) leading the prices down having traded at 50 yesterday, so discounted 50% on the possibility of an Irma loss for sponsor Heritage.

The market for live cat (live catastrophe) trading on the back of the approaching major hurricane Irma has not yet sprung into life, with plenty of potential buyers looking for last-minute protection but only a few trades and a market that is trying to find the right pricing levels to get deals executed.

It’s very early days to speculate on landfall for major hurricane Irma, which became a Category 5 monster storm this afternoon with winds of 180 mph, but should the forecast track prove correct and Irma make landfall in Florida it is expected that it would hit reinsurance interests hard, according to KBW.

Latest hurricane Irma updates can be found in this new article. Major category 5 hurricane Irma is currently heading west across the Atlantic, with winds of 180 mph and a forecast that shows maintained intensity and a potential threat to the United States coastline by this weekend, including south Florida, but with some uncertainty in […]