hurricane

The eventual insurance and reinsurance industry loss from last weeks hurricane Michael is not expected to trigger any of its catastrophe bond positions, according to specialist insurance-linked securities (ILS) investment manager Plenum.

The insurance-linked securities (ILS) market’s exposure to hurricane Michael is not expected to be material, according to Fitch Ratings, although some losses will fall to collateralized reinsurance and quota shares exposed to the lower layers of programs covering the affected region.

Catastrophe risk modelling specialist Corelogic has increased its estimate for the wind and storm surge related insurance industry loss from hurricane Michael, adding half a billion to each end of its estimate range, making it $3 billion to $5 billion.

All of the catastrophe related loss activity witnessed around the globe so far in 2018, including this weeks impacts from hurricane Michael, will still be absorbed by the combined earnings of insurance and reinsurance firms, according to Standard & Poor’s.

Hurricane Michael will result in an insurance and reinsurance market loss of close to $8 billion from wind and storm surge, excluding NFIP losses, according to catastrophe risk modelling specialists Karen Clark & Co.

The reinsurance market and as a result some collateralized providers of reinsurance capital may take a greater share of losses from hurricane Michael’s Florida and beyond impacts than they did for last month’s hurricane Florence, according to analysts.

Insurance-linked securities (ILS) funds that are either mutual funds or listed vehicles saw their prices decline less than the share prices of global insurance and reinsurance funds as hurricane Michael made its devastating Category 4 hit on Florida.

The eventual insurance, reinsurance and perhaps ILS fund industry losses from hurricane Michael’s strong Category 4 landfall on the Florida Gulf Coast yesterday are unlikely to be sufficient to move the market, according to brokers, rating agencies and analysts.

The wind and storm surge related insurance industry loss from hurricane Michael is estimated to be between $2 billion and $4.5 billion by Corelogic, based on a pre-landfall data assessment of the storms impacts to insured assets.

Hurricane Michael has strengthened once again, becoming a major Category 4 storm with 155 mph sustained winds and higher gusts and is forecast to make landfall in Florida in the coming hours as an extremely dangerous storm, with experts warning of a life threatening situation from winds and storm surge.