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The reinsurance industry is no stranger to natural catastrophes, but nat cat losses from 2017 and 2018 caught reinsurers by surprise.

On the heels of hurricanes Harvey, Irma and Maria in 2017 came 2018's Hurricane Michael, Typhoon Jebi and the California wildfires. Aon pegged the aggregate losses from those two years at $240 billion.

It wasn't the hard numbers that caught the industry off guard, though; it was how far off the loss estimates were. Claims development from 2017's Hurricane Irma was 26% higher than expected, according to JLT Re, and insured losses from 2018's Typhoon Jebi were triple the initial estimate of $5 billion.

The large loss creep has trapped alternative capital, caused traditional reinsurers to increase reserves and impacted rates. Not surprisingly, it also has left ILS investors cautious.

In this special section, Best's Review takes a deeper look at a reinsurance market in flux.

The Reinsurance Special Section is sponsored by Munich Re. Go to to listen to the Munich Re podcast or access it at

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Title Annotation:Reinsurance
Publication:Best's Review
Date:Aug 1, 2019
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