U.s. insured losses in March from severe weather are ex- pected to pass $1.8 billion,
according to impact Forecasting, the
catastrophe-model-development cen-
ter for aon Benfield.
u.s. events in the quarter included
a severe-weather outbreak through
parts of the Midwest, the tennessee
Valley and the southeast during the
first week of March, which spawned
at least 65 tornadoes and caused
over $1.1 billion in insured losses
from over 170,000 claims.
another system during the month hit
the Great Lakes, and included a tornado
that damaged or destroyed more than
200 homes in dexter, Mich. that event is
expected to cause about $150 million in
insured losses from about 20,000 claims.
“Following an active 2011 u.s. severe-weather season, the first quarter of 2012
E AN INSURANCE AGENT assesses the damage to a home
in Dexter, Mich., on March 16 after a tornado roared
through the neighborhood of Huron Farms a day earlier.
has also proven itself to be markedly
busy,” says steve Jakubowski, president
of impact Forecasting. “through the first
three months of 2012, we have already
sustained more than $1.8 billion in insured
losses from convective storm events as
we enter the climatologically most active
severe-weather months of the year.”
month, a magnitude- 7. 4 earthquake
in central and southern Mexico
damaged around 44,000 homes and
is expected to cause $163 million in
insured losses.
a magnitude- 7.1 quake struck central
chile, and was labeled an aftershock
from February 2010’s magnitude-8.8
event. economic losses are expected to
be below $100 million, and no insured-
loss estimate was provided.
another earthquake struck
china’s Xinjiang region—this one
a magnitude- 5.8 temblor. it left
36,641 people homeless and caused direct
economic losses of $82.7 million. no
insured-loss estimate was given for this
event.
BY PHIL GUSMAN
Reinsurance rates at the april 1 renewals continued to rise due to 2011 loss events, according to a Guy
carpenter briefing released april 5.
the global risk and reinsurance advisor
says the april 1 renewals are “continuing
the general trends observed at Jan. 1, 2012.”
the briefing notes that april 1 was a
“significant renewal date” for the asia-
Pacific region, as it provides the first
indication of how heavy catastrophe losses
that hit the area have affected rates.
For Japan, Guy carpenter (Gc) says
capacity was secured for risks, but at
increased prices and with tightened terms
and conditions in many lines. rates were
up in all property-catastrophe lines, while
casualty lines “showed a mixed picture,”
but with a trend of modest increases.
not surprisingly, earthquake coverage
saw significant price increases in Japan, and
Gc notes that the average price of Japanese
earthquake excess-of-loss capacity has
practically doubled since the 2010 renewal.
Prices for Japanese windstorm coverage
also rose despite a loss-free year for the market.
For australia and new Zealand, Guy
carpenter notes that significant 2011 losses
such as flooding in australia and a February
In the U.S. property-catastrophe
reinsurance market, the reinsurance
advisor says quotes were generally in
line with Jan. 1 renewals, ranging from
down 12% to up 11%.
earthquake in christchurch, new Zealand,
occurred prior to the april 1, 2011-april
1, 2012 period. still, the advisory firm
says reinsurers “signaled a desire to move
reinsurance pricing upward again, consistent
with their approach to the Jan. 1 renewals.
this was particularly true for those april 1
renewals that had missed any significant
corrective action on pricing in 2011.”
in the u.s. property-catastrophe
reinsurance market, Guy carpenter says
quotes were generally in line with Jan. 1
renewals, ranging from down 12 percent to
up 11 percent. But the briefing notes that
the number of programs renewing in april is
much smaller than that renewing in January.
additionally, Gc says rate increases were
more pronounced for some programs that
renewed early at this time last year, as they
had received quotes from terms before the
Japan earthquake and release of the rMs
Version 11.0 cat model were factored in.
the briefing adds that programs seeking
capacity beyond that which was expiring
received greater pricing scrutiny. “in order
to ensure sufficient capacity, therefore,
some companies put out higher firm-order
pricing than they may have otherwise,”
Guy carpenter explains. “reinsurers
continued to show more willingness to
reduce support for programs significantly if
pricing did not meet expectations.”
Where pricing does meet expectations,
though, the firm says there continues to be
sufficient capacity—with reinsurers willing
to provide substantial support. NU
