Hurricane Irene's impact on global reinsurers will be limited: S&P
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Losses from Hurricane Irene are likely to have only a limited impact on global reinsurers, according to a report by Standard & Poor's Corp.
But the rating agency noted that the hurricane comes after a series of natural catastrophes already this year, and it also comes amid forecasts of a more-active-than-average North Atlantic hurricane season.
Preliminary estimates suggest that insured losses from Hurricane Irene, which made landfall in the United States on Aug. 27, likely will be less than $5 billion, S&P noted.
“We do not believe that the magnitude of this event is such that it will significantly influence the industry's creditworthiness and expect few, if any, ratings changes as a result,” said Taoufik Gharib, a credit analyst at S&P in New York, in a statement.
He said S&P believed the hurricane likely will affect primary insurers' retentions to a greater extent than reinsurers'.
S&P does not expect to take any rating action on any natural catastrophe bonds as a result of the hurricane, the statement added.
The rating agency noted, however, that it would continue to monitor the aftermath of the hurricane and take any appropriate action if loss estimates change.
S&P noted that it believes the insurance and reinsurance sectors overall were well-capitalized enough to absorb losses from the hurricane.
It noted, however, that the hurricane comes after a string of large natural disasters this year, including the earthquake and tsunami in Japan, the earthquakes in New Zealand, floods and cyclones in Australia and winter storms and spring tornadoes in the United States, as well as several large individual commercial insurance claims from around the world.
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