Catastrophe risk modelling specialist Karen Clark & Company has updated its estimate for insurance and reinsurance market losses from the ongoing winter storm event in the United States, which has been named winter storm Uri, to $18 billion, reflecting the widespread and severe impacts felt.
As we explained earlier today, the feeling was that industry insured losses from the winter storm and related weather would reach the double-digit billions of dollars.
Now, with Karen Clark & Company’s (KCC) latest update, it’s clear that the economic and financial impacts of the severe and freezing winter weather are significant and as a result the hit to insurance and reinsurance markets will be as well.
Yesterday, KCC had told its clients in a briefing document that the ultimate industry loss from this US winter storm was already likely in the double-digit billions of dollars, on a modelled estimate basis.
Moody’s had said it would be in the billions of dollars as well and broker Aon had said the costs would rise well into the billions, with a large proportion of the property losses likely covered by insurance and therefore presenting exposure to reinsurance.
In addition, the Insurance Council of Texas had said they expected claims levels to be on a par with 2017’s hurricane Harvey, which was estimated to have caused an insurance and reinsurance market loss of around $19 billion.
So KCC’s new updated industry loss estimate puts the overall impacts of the storm at close to that level, although based in impacts more widespread than just Texas, we understand.
At an industry-wide loss of around $18 billion, as KCC’s modelled analysis suggests, impacts to reinsurance layers and also potentially some ILS contracts, likely collateralized reinsurance, are possible.
While there are catastrophe bonds that cover winter storm loss events, at this stage it is too early to tell whether any might be exposed to this event.
KCC raises US winter storm insurance industry loss estimate to $18bn was published by: www.Artemis.bm
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Original Article Posted at : https://www.artemis.bm/news/kcc-raises-us-winter-storm-insurance-industry-loss-estimate-18-billion/