Bermuda unveils major reinsurance hit from hurricanes

As the impact on reinsurers from hurricanes Harvey, Irma and Maria (HIM) continues to emerge, the Bermuda Monetary Authority (BMA) said Bermuda-based reinsurers estimate a total of US$31.2bn in HIM-related losses.

The great majority, US$30.6bn, will cover losses in the US and Puerto Rico.

"Based on publicly available catastrophe loss estimates, Bermuda reinsurers will be picking up 30% of the Harvey, Irma and Maria losses from this record-setting hurricane season," BMA said in a press release.

The authority added that the figure was determined from its first US data claims survey completed earlier this month. The release noted that the loss information includes both direct insurance and reinsurance, tabulating data compiled from 250 companies responding to the survey, "including both commercial insurers/reinsurers and alternative capital entities and insurance linked securities funds."

The Bermuda figures reflect the broader impact on insurers and reinsurers hit by historic catastrophes in the third quarter, impacts that led Willis Towers Watson to recently project major price hikes in 2018 for reinsurance renewals.

Swiss Re's chief economist Kurt Karl, as reported in sector news outlet Reinsurance News, said 2017 has "not been a fun year for profitability in the reinsurance industry", discussing impacts from HIM, Mexico's earthquakes and the California wildfires.

"From our point of view this was both a capital and an earnings event and will have the effect of causing price increases in insurance and reinsurance lines," said Karl, who added that the reinsurance sector as a whole is looking at a full-year ROE of around -4% in 2017 with a combined ratio across the sector at 115%.