A recent report, “Reinsurance Industry Leaders Discuss Lessons Learned From Hurricane Sandy,” published Nov. 29, 2012, on RatingsDirect, Standard & Poor’s Ratings Services, notes that “reinsurers had three very good quarters until Superstorm Sandy hit the U.S. East Coast on October 29.
It also contrasts 2012 with 2011, which S&P described as a “record-breaking year” for the reinsurance industry, “with $105 billion in natural catastrophe insured losses globally. Up until just a few weeks ago, it seemed that 2012 would be relatively uneventful.”
However, as a result of Sandy, S&P said it expects reinsurers’ operating performance to be certainly “less strong in the storm’s wake. But, according to panelists at the Bermuda Reinsurance 2012 conference sponsored by Standard & Poor’s on Nov. 13-14, 2012, the storm’s legacy will be less about fourth-quarter results and more about the lessons learned–and the effect they’ll have on the industry going forward.”
S&P said the “market appears to be having trouble reaching a consensus about what total insured losses will be post-Sandy. That these calculations can still be unclear so long after the storm highlights how difficult it can be to plan ahead for these events. The fact that Sandy hit New York City, with its dense population and high concentration in the financial markets, will be a big part of the storm’s legacy in the reinsurance industry.”
Credit analyst Taoufik Gharib, director at Standard & Poor’s, moderated the discussion, covering topics such as judging the financial success of a company, reinsurers’ investment strategies in the current market, and the importance of enterprise risk management.
Source: Standard & Poor’s