Printer Friendly

High storm losses said to hit primary writers.

The higher the insured losses from Hurricane Katrina, the smaller the relative share of those losses property/catastrophe reinsurers will have to bear, according to a new report by the Tillinghast and Reinsurance businesses of Towers Perrin.

While this may sound "weird," it's true, said Amy Bouska, a managing principal of Towers Perrin. "They're definitely going to take on more on the low end of the estimate--significantly more than from the four hurricanes of last year," said Bouska, one of the main editors of the report.

But as the insured loss estimate edges upward, reinsurers will bear a smaller proportion of the losses, primarily because heavily affected insurers will have exceeded their reinsurance protection and will be "out the top," she said.

"This will increase appreciation for high-layer reinsurance," Bouska said. High-layer reinsurance can be more costly, and some insurers don't purchase it because of this.

The report estimates Katrina, a Category 4 storm on the Saffir-Simpson scale when it made landfall in Louisiana, caused $40 billion to $55 billion in insured losses. Insurers will retain 47% to 53% of this loss, based on the report's estimates, and reinsurers will absorb 52% to 44% of the loss, while capital markets get 1% to 3%.
COPYRIGHT 2005 A.M. Best Company, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2005, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:Briefing
Author:Cornejo, Rick
Publication:Best's Review
Article Type:Brief Article
Geographic Code:1USA
Date:Nov 1, 2005
Previous Article:Church insurers take hit from Hurricanes Katrina, Rita.
Next Article:U.S life insurers review their Japan strategy.

Related Articles
Was it something we said? The government's defensive reply to TEI's amicus brief in Mead strikes a nerve.
Counties may seek federal aid for damage.
SAUDI ARABIA - Aug. 6 - Pentagon Briefing Depicts Saudis As Enemies.
After the storms: homeowners deductibles and reinsurance raise questions in Florida.
Area crops escape damage from hail-slinging storm.
Member news: Hurricane Katrina evacuees--one year later.
Stilling The Storm.

Terms of use | Privacy policy | Copyright © 2020 Farlex, Inc. | Feedback | For webmasters