REINSURERS 'TO TAKE MAJORITY OF HURRICANE IDA LOSSES'

Reinsurers’ catastrophe budgets looked set to be smashed as analysts predicted they would take the majority of losses from Hurricane Ida. Early indications suggest Ida, which slammed into Louisiana as a category four storm, could be a $20bn-plus loss event, making it one of the top 10 costliest hurricanes on record for re/insurers. But there were concerns the final tally could be significantly higher amid sizeable flood losses and continued power outages. Based on this estimated size of event, losses will hit reinsurance attachment points, given the regional insurer profile in Louisiana, analysts said. And with significant losses in 2021, aggregate covers could also be triggered. Reinsurers’ 2021 catastrophe budgets were already on course to be consumed after the July floods in Europe. At the half-year stage, Swiss Re and Scor had incurred losses above budget, while Munich and Hannover Re were below budget. According to UBS, on average, 97% of full-year budgets have been consumed already. Adding a $20bn Ida loss means reinsurers would be exceeding annual budgets by 51%, on average, the analysts added.