In this episode of A.M. BestTV, David Blades, senior research analyst, and Chris Draghi, senior financial analyst, both with A.M. Best, said rated insurers operating in Florida appear prepared to absorb anticipated catastrophe losses from Hurricane Michael, with reinsurers expected to take a larger share of losses than they did for Hurricane Florence in September.
“I think it is safe to say from the standpoint of insured and economic losses, these will be a little higher than the initial estimates, given how the storm intensified before making landfall,” said Blades. “A.M. Best believes its rated companies are sufficiently capitalized with appropriate reinsurance programs in place to absorb any claims. We think reinsurers will absorb more losses from Hurricane Michael as compared with that from Hurricane Florence, but even then, losses should still be within reinsurers’ catastrophe budgets and overall loss estimates.”
Draghi discussed the preparedness of the so-called “take–out” insurers in Florida.
“These companies were tested last year with Hurricane Irma,” said Draghi. “Different areas were brought to light that needed certain revisions, such as reinsurance protection or concentration management, but other mitigation strategies proved effective. Overall, this is definitely a unique collection of companies that have their own distinctive strategies, old and new, that will affect the affordability and availability of insurance within the market.”
To access a copy of this briefing, titled, “Insurers and Reinsurers Brace for Hurricane Michael Catastrophe Losses,” visit http://www3.ambest.com/bestweek/purchase.asp?record_code=278969.