hurricane Irma 2017

The insurance and reinsurance industry loss due to the impacts of hurricane Irma on the Caribbean islands and the United States is estimated to be up to $55 billion by catastrophe risk modeller RMS, with economic losses expected to be up to $95 billion.

The first full-year profit warning from a major reinsurance firm has been issued this morning by Talanx owned, German headquartered global player Hannover Re, which said the combined losses from recent catastrophe events could surpass its major loss budget.

Markel CATCo Investment Management has delivered a warning to investors in its flagship listed CATCo Reinsurance Opportunities Fund Ltd. that full-year performance could be erased by the impacts of recent major catastrophe events.

The CCRIF SPC (formerly the Caribbean Catastrophe Risk Insurance Facility) has announced that its payouts made to Caribbean governments due to the impacts of hurricane Irma will reach $31.2 million, while the facility has now passed $100 million of payouts to members since its launch.

The private insurance and reinsurance market is forecast to face an industry loss of up to $27 billion from the impacts of hurricane Irma to property, according to risk modelling specialists Corelogic, with up to $19 billion from wind damage and up to $8 billion from commercial property flooding.

Stock exchange listed ILS fund strategy the Blue Capital Alternative Income Fund (formerly known as the Blue Capital Global Reinsurance Fund) has already factored the impact of hurricane Harvey into its August net asset value, reporting 0.45% performance for the month even after the losses are taken into account.

In recent days a handful of secondary market trades have been seen for catastrophe bonds that provide retrocessional reinsurance on an aggregate basis, as investors try to understand the potential for losses due to hurricanes Harvey and Irma’s combined impacts.

The Florida Office of Insurance Regulation has already reported almost $2 billion of insurance claims filed from hurricane Irma, with more than 335,000 claims filed and just 4.5% closed to date. The FLOIR data shows that claims have been quickest to come in from the eastern coast of the state.

Florida focused primary insurance group HCI (Homeowners Choice) has revealed that it expects its losses from hurricane Irma will run into the hundreds of millions, but the firms reinsurance arrangements will take the bulk of its exposure from the storm.

A number of outstanding catastrophe bonds have had their secondary market values marked down, as losses could be expected due to the impact of recent hurricanes Harvey and Irma. But the brokers do not currently seem to have a clear view of cat bond losses and prices in some cases diverge dramatically.