tropical storm Michael 2018

ILS and some reinsurance markets are beginning to show signs of fearing and in some cases expecting an Irma-like loss creep to occur with more recent hurricane Michael, leading some to even suggest that the industry insured loss could near $12 billion.

The industry loss to insurance and reinsurance interests from hurricane Michael is estimated to be somewhere between $6.8 billion and $10 billion by RMS, with the majority driven by wind damage to residential properties.

Insurance carriers reviewed by Demotech all have the capital and reinsurance backing that is required for them to respond to claims in the wake of hurricane Michael, a storm that may have caused as much as $15 billion to $20 billion of insured losses according to the firm.

Reinsurance pricing at the upcoming key January 2019 renewals could be supported by the active hurricane season and the unique features of recent storms, meaning rates may hold up better than had been anticipated, according to Morgan Stanley’s analysts.

Hurricane Michael is estimated to have caused the insurance and reinsurance industry a loss in the range of $6 billion to $10 billion by catastrophe risk modeller AIR Worldwide.

U.S. primary insurer FedNat expects to pass on most of its losses from hurricane Michael to its reinsurance providers, with an estimated $275 million gross loss anticipated, but as little as $23 million expected to be retained by the firm.

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.