Insured losses from three big hurricanes in North America this year have cost the industry around $100 billion, German reinsurance giant Munich Re said on Thursday.
Damages from storms Harvey, Irma and Maria of that magnitude would exceed by far industry-wide losses of about $74 billion caused by Hurricane Katrina, which hit New Orleans in 2005.
For Munich Re alone, the three hurricanes accounted for losses of 2.7 billion euros ($3.13 billion) in the third quarter, leading to a quarterly net loss of 1.4 billion euros [$1.6 billion] at the reinsurer.
Munich Re confirmed on Thursday it would eke out only a “small profit” for the full year. That marks a sharp turnaround from expectations earlier this year for a net profit of between 2 billion to 2.4 billion euros ($2.4 billion-$2.8 billion).
Its estimate for industry-wide losses from the three hurricanes is higher than Swiss Re’s estimate of $95 billion in total market losses from the hurricanes and earthquakes in Mexico.
A series of hurricanes as well earthquakes have rocked the insurance industry after years of muted losses.
The disasters have only compounded extreme pressure from low prices caused by fierce competition and low interest rates that have eroded profit.
Munich Re finance chief Joerg Schneider said he expected reinsurance rates to rise, especially in areas hit by disasters.
As a sign of the strain of the disasters on profitability, Munich Re said that its property and casualty reinsurance group would report a so-called combined ratio of 112 percent for the full year, compared with 97 percent in 2016.
The ratio is a closely watched measure of expenses to premium income and figures over 100 percent point to losses.
The third-quarter loss, while large, does not come as a surprise. The reinsurer warned last month that it would record a 1.4 billion loss.
($1 = 0.8618 euros) (Reporting by Tom Sims; Editing by Maria Sheahan and Susan Fenton)
- Munich Re Expects Q3 Loss After Hurricane Claims of $3.2B
- Swiss Re Estimates $3.6B in Claims from U.S. Hurricanes & Mexican Quakes
- Zurich Estimates Claims of US$700M from Hurricanes Harvey, Irma & Maria
- Argo and Aspen Issue Loss Estimates for Q3 Natural Catastrophes
- S&P No Longer Expects Global Re Rate Drops at Jan. 1
- Q3 Catastrophe Losses Will Bring Rate Hikes by London Market Insurers: Fitch
- More Re/Insurers Issue Their Q3 Natural Catastrophe Loss Estimates
- Lloyd’s Outlook Is Negative on Hurricane Losses; Ratings Affirmed: S&P
- XL Group Estimates $1.48B in Q3 Natural Catastrophe Losses
- Insurers, Reinsurers Tally Maria, Irma, Harvey and Other Disaster Losses
- Partner Re, RenRe & Third Point Re Estimate Q3 Natural Catastrophe Losses