Bermuda (Re)insurers To Pay $13 Billion of Hurricane Ian Losses

Bermuda (re)insurers anticipate incurring gross claim losses of more than $13 billion in payments to US policyholders and cedants to cover damages from Hurricane Ian.

This loss estimate is based on commercial insurers' market claims data collected by the Bermuda Monetary Authority (BMA) in November 2022.

Estimates from catastrophe risk modelers and insurance industry analysts have suggested that (re)insurance losses from Hurricane Ian will total between $50 billion and $70 billion. Consequently, Bermuda (re)insurers may incur as much as 25 percent of the industry losses, the BMA said.

September 2022's Hurricane Ian was responsible for approximately 130 fatalities as it made landfall in Florida and the Carolinas, causing catastrophic damage. The overall industry loss estimate for Hurricane Ian includes wind, storm surge, and inland flooding losses in Florida, South Carolina, North Carolina, Georgia, and Virginia.

"The survey results demonstrate Bermuda's steadfast role in supplying risk capacity to the US and other catastrophe-exposed parts of the world," Craig Swan, CEO of the BMA, said in a statement. "This role's importance is heightened by the increasing frequency and intensity of extreme weather events, which continue to exact tremendous human and financial tolls.

"The ability of US insurers to cede risk to Bermuda enables diversification of risk globally and it helps stabilize the cost of buying insurance—particularly property and catastrophe insurance—for customers living in catastrophe danger zones," Mr. Swan said. "Such a partnership bolsters policyholder protection and contributes to closing the protection gap."

To underscore the Bermuda market's role in addressing US catastrophe risks, the BMA noted that Bermuda (re)insurers picked up 30 percent of hurricanes Harvey, Irma, and Maria industry losses from the 2017 record-setting hurricane season; while in 2021, Bermuda (re)insurers estimated paying 30 percent of Hurricane Ida losses and 20 percent of industry losses for the Texas Winter Storm Uri.