A.M. Best Comments on Potential Impact of Hurricane Irma on Caribbean Property/Casualty Insurers
A new Best’s Briefing, “A.M. Best Comments on Potential Impact of Hurricane Irma on Caribbean Property/Casualty Insurers,” notes that most insured losses will be passed through to financially strong reinsurers providing property catastrophe reinsurance protection to the primary carriers. The net retention level for most rated carriers is generally less than 10% of shareholder equity. Reinsurance limits also are typically high enough to cover losses well above anything that has been experienced in the past. However, Hurricane Irma is not a typical modeled storm, and depending on the magnitude of damages sustained, losses from the hurricane could be considerably larger than anticipated. With Hurricane José potentially days behind, primary carriers often are quick to reinstate reinsurance limits once the first event has occurred.
A.M. Best’s Credit Rating assessment includes an analysis of a company’s balance sheet strength and risk-adjusted view of capitalization, which incorporates the modeled impact from catastrophes. For wind events,
While tail events such as this one are rare,
To access the full copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=265437.
Copyright © 2017 by A.M. Best Rating Services, Inc. and/or its subsidiaries. ALL RIGHTS RESERVED.
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