Munich Re and Swiss Re each face 5 percent of the bill for Hurricane Florence, which is barrelling toward the Carolinas on America’s east coast as a Category 1 storm.
Though the full impact of Florence - which is set to make landfall tomorrow - remains highly uncertain, analysis from Jefferies estimates the rough market share of losses could leave each Munich Re and Swiss Re with 5 percent of the tab, while Scor and hannover Re are both likely to pay for 1 percent of losses.
Jefferies analyst Philip Kett said London market carriers Beazley and Hiscox are also set to take a hit.
The hurricane’s impact on Beazley and Hiscox are much harder to calculate, the firm said, due to Hiscox managing FloodPlus, a private flood consortium of Lloyd’s insurers in which Hiscox has a 30 percent share.
The carrier’s first half results show the platform was quoting for 1,200 risks per day, primarily on the US East Coast, this may lead to a higher market share of the losses than has historically been the case, Jefferies said.
In a note, Kett said Munich Re - in particular - was well placed to weather the storm. The German reinsurance giant has one of the strongest capital positions, with a Solvency II ratio of 250 percent and an estimated EUR4.8bn reserve buffer.
The firm noted that of Munich Re’s 2018 natural catastrophe budget of EUR1.4bn, only EUR159m was used in the first half of 2018.
Hurricane Florence has weakened to a Category 2 hurricane as it nears the Carolina coastline generating storm surge and rainfall that is forecast to generate billions of dollars of market losses.
According to the National Hurricane Center, Florence is barreling Northwest across the Atlantic generating wind speeds of over 95 mph and is expected to make landfall in southern North Carolina within the next 36 hours.
Catastrophe risk modeler RMS said yesterday that based on historical comparisons, losses could reach $15bn-$20bn, projecting that Florence will be the strongest hurricane to make landfall over North Carolina since Hurricane Hazel in 1954.
Jefferies said it expects insured losses will be materially lower than the $20bn level.