Peter Schorsch
Despite a deadly and costly storm season this year, Aon Benfield President Andy Marcell said Thursday reinsurers were more than prepared to handle the call and bounce back quickly.
“I feel like an elephant dancing on the head of a pin,” Marcell said, regarding the positive picture he painted compared to those in other segments of the insurance industry attending the 2017 Florida Chamber Insurance Summit.
Hurricane season isn’t over yet, and already three powerful storms have hit the U.S. and its territories, each causing billions in damage while breaking decades-long records.
Irma was the first hurricane of its magnitude to hit the Florida Keys since Donna in 1960; Maria was the first storm of its strength to hit Puerto Rico since 1942; Harvey, which kicked off the 2017 hurricane season in earnest, was also the most powerful storm Texas had seen in well over a decade and caused flooding of biblical proportions.
Despite what felt like unprecedented back-to-back-to-back catastrophes, Marcell said total insured losses this year haven’t yet hit 2005 levels. They were significantly higher than the average over the past decade, sure, but nothing the industry couldn’t handle.
That’s not to say 2017 stands no chance of passing a mark set more than a decade ago.
“One of the caveats to the 2017 losses is that we do have developing losses in the California wildfires, which are currently forecast at about $8 billion,” Marcell said, adding that the “wind vs. flood” debate over some claims in the aftermath of Hurricane Harvey could also jack up total losses.
Still, Marcell said the reinsurance market is in a much better place financially now than it was in 2005, pointing to successful, diversified business ventures many reinsurers started during the comparative lull of the past several hurricane seasons.
There was more than $605 billion in reinsurance capital in the market this year, substantially more than a decade ago and $35 billion more than last year.
Marcell said so far Aon’s Florida clients have collected more than $800 million, with an average turnaround time of six days.
“Reinsurers have responded incredibly well,” he said, adding that everything is working “tremendously well” for the Florida market in particular.
