Benedict Burke, chief client officer, International, gave ClaimsWorld an update on the impact of natural catastrophes in 2017.
“The past few months have been dominated by our response to the major natural catastrophes that have impacted our clients. These include Hurricane Harvey, Irma, Maria and Nate, Typhoon Haiyan and the two earthquakes in Mexico. According to RMS, the total insured losses from major hurricanes in 2017 is expected to be in the range of $75 billion to $120 billion, a magnitude that has not been seen since 2011, and not in the U.S. and Caribbean since 2005.
For now the tally of losses rises, with the usual disparity between loss estimates. While AIR Worldwide anticipates the M7.1 earthquake that hit Mexico on 19 September will cost the industry up to $2.1 billion, RMS does not expect it to exceed $1.2 billion, while Mexico-based ERN International estimates claims could go as high as $4.8 billion.
Presently all the Caribbean islands devastated by Hurricanes Irma and Maria have limited power, cellular coverage, accommodation and fuel. Given these challenging conditions on the ground, we are continuing to work closely with our clients to fully understand their loss volume expectations in order to deploy staff to the right locations.
Crawford Global Technical Services® is expertly handling the large complex losses, many in excess of $1million. Where adjusters cannot be immediately deployed we have been able to utilize technology to prevent undue delays to the remediation process. This includes our WeGoLook® drone operators and Lookers® to show clients the extent of damage to their hotels and other businesses across the Caribbean, well before adjusters could be mobilised on the ground.
It is clear these events are already having a profound impact on the insurance industry. Standard & Poor’s has placed Lloyd’s outlook on negative, as the market anticipates $4.5 billion in claims from Hurricanes Harvey and Irma alone. Presently, Crawford is handling 5,000 claims in the U.S. on behalf of Lloyd’s.
Market commentators are anticipating there will be price rises on London Market re/ insurers’ loss-affected lines. Major re/insurers have issued profit warnings and some are anticipating more than just an earnings event. After several years of a soft market these dynamics could alter re/insurance pricing trends more broadly. However, there is a feeling the days of a true market correction are over given the ease at which capital can now flow back into the industry post-loss.”