International insurance companies are expected to cover half of losses from Hurricane Sandy, which currently are estimated at more than $16 billion and could approach $20 billion.
“Hurricane Sandy underscores the important role that international reinsurers play in times of crisis. Global reinsurers are financially strong and have substantial capacity to support U.S. insurance companies as they review their portfolios in light of claims,” said Brad Kading, president and executive director of the Association of Bermuda Insurers and Reinsurers (ABIR), which represent 22 international insurers and reinsurers that derive business from more than 100 countries.
“A recent report by the catastrophe risk management firm Karen Clark & Company, based on an analysis of more than a century of hurricanes, warns that the United States can expect insured losses of at least an average of $10 billion from a hurricane every four years. Simply put, the less insurance capacity we have to remedy the damage from these storms, the higher the costs will be for U.S. consumers,” Kading added. “Bermuda’s reinsurers are the largest suppliers of catastrophe reinsurance to U.S. insurers and have an excellent record of claims payment. With the potential losses from extreme weather on the rise, the need for global reinsurance will continue to expand.”
“As we reflect on the disastrous events of last year and anticipate future catastrophes, it is clear that the nation needs a robust insurance market that is open to as many competitors as possible and encourages direct foreign investment. If perceptions of risk increase, or consumer demand is amplified, international reinsurers are ready to meet the market’s needs,” Kading continued.
