A self-descriptive article from Standard & Poor’s Ratings Services -“Increases In Hurricane Loss Estimates To Have Little Impact On Insurer Ratings -” clarifies some questions concerning the actual and potential impact of this fall’s catastrophes on the insurance industry.
S&P notes that “five months after Hurricane Katrina, substantial (billion dollar) differences remain between general estimates of the total industry loss and the company-by-company assessments of ultimate loss payouts.” Despite the differences S&P indicated that it believes any “loss estimate revisions will likely result in a limited number of rating changes.”
The rating agency goes on to state that “despite the shortcomings of hurricane risk models, primary insurers and reinsurers still demonstrated that they were better prepared for the 2005 storm season than they have been since Hurricane Andrew struck in 1992 or the events of Sept. 11, 2001.”
Better than that, S&P said it expects that companies will “continue to improve their catastrophe risk model assumptions and more accurately gather information in the future.”
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