Global reinsurers will report “solid underwriting profitability” for the first quarter of 2014 because of a lack of large catastrophes, among other factors, according to analysis by Fitch Ratings Ltd.
Reinsurers' results for the first quarter of this year likely will be comparable to those posted for the first quarter last year, “as the industry has not suffered a significant catastrophe loss event since Hurricane Sandy in the fourth quarter of 2012,” London-based Fitch said.
The largest insured losses to occur in the first quarter of 2014 were severe winter storms in the United States and flooding and storms in the United Kingdom, Fitch noted.
Although the winter storms in the United States may result in losses of as much as $1.5 billion, according to the Insurance Information Institute, and losses from the U.K. storms and floods are estimated by the Association of British Insurers to be about £1.1 billion ($1.83 billion), these losses were not costly enough to trigger insurers' excess-of-loss catastrophe reinsurance treaties, Fitch noted.
“Losses for reinsurers will generally be limited to facultative, per risk and pro rata quota share reinsurance treaties,” Fitch noted.
“In the case of the United States, this was partly due to increased retentions by primary insurance companies over the last few years, as improved capital positions have allowed insurers to retain more risk,” it said.