Bermuda reinsurers anticipate $13 billion in Ian claims

Bermuda (re)insurers estimate that they will incur gross claim losses of more than $13 billion in payments to policyholders and cedants in the United States (US) to cover the effects of Hurricane Ian, around 25% of the total losses.

This loss estimate is according to commercial insurers’ market claims data collected by the Bermuda Monetary Authority in November 2022.

Based on publicly available estimates from catastrophe risk modellers and insurance industry analysts, (re)insurance losses resulting from Hurricane Ian are expected to total between $50 billion and $75 billion.

The overall industry loss estimate for Hurricane Ian includes wind, storm surge and inland flooding losses in Florida, South Carolina, North Carolina, Georgia and Virginia.

Craig Swan, BMA chief executive officer, said, “The survey results demonstrate Bermuda’s steadfast role in supplying risk capacity to the US and other catastrophe-exposed parts of the world.

“This role’s importance is heightened by the increasing frequency and intensity of extreme weather events, which continue to exact tremendous human and financial tolls.

“The ability of US insurers to cede risk to Bermuda enables diversification of risk globally and it helps stabilise the cost of buying insurance - particularly property and catastrophe insurance - for customers living in catastrophe danger zones. Such a partnership bolsters policyholder protection and contributes to closing the protection gap.”

Gerald Gakundi, director, Supervision (Insurance), added, “We are deeply mindful that the most important consideration after a natural disaster is rebuilding - for the community and the people who comprise it.

“During such challenging times, Bermuda (re)insurers’ ability to respond quickly in settling potential claims obligations allows for these critical efforts and enhances climate resilience.”