Gains for reinsurers as Irma wanes
REINSURERS tasked with covering major disasters jumped in European stock markets amid signs that payouts for damage caused by Hurricane Irma will be lower than expected.
Firms including Swiss Re, Munich Re and Hannover Re were among the biggest gainers on the Stoxx 600 Insurance Price Index yesterday, after the hurricane weakened and dire predictions were proved wrong.
Hannover Re confirmed its full-year profit target and said damage from Irma will end a decline in catastrophe reinsurance rates. While it’s too early to estimate the costs to Hannover Re and the wider industry, the storm didn’t follow the path that would have created the greatest damage, chief executive Ulrich Wallin said at a media briefing in Monte Carlo. Estimated damage Enki Research’s estimate for total damages caused by Irma dropped to $49 billion (R632.3bn) from $200bn as the hurricane eased to a category 2 before reaching the populous Tampa Bay area. Chuck Watson, an Enki disaster modeller in Georgia, estimated insured losses at about $19bn. Reinsurers cover other insurance companies in the event of major disaster losses. Threshold “Modelling indicates that there is a 10 percent chance of insured wind losses from Irma exceeding $60bn,” catastrophe risk-modelling firm RMS said on its website. “This threshold continues to decrease from previous guidance, reflecting the increasing probability of a predominantly offshore storm track.”
Beazley topped the insurers index with a 6.6 percent gain at 8.43am in London. Swiss Re rose 5 percent and Hannover Re climbed the most since November. – Bloomberg