Drop in disaster payouts strengthens case for reinsurance price cut
ZURICH (Reuters) - Payouts by insurers for disaster claims in the first six months of the year were below the average for the past 10 years, a study showed on Wednesday, which is likely to bolster insurers' calls for cheaper reinsurance.
The global insurance industry covered $21 billion in losses from natural catastrophes and man-made disasters in the first half of the year, preliminary estimates from a study by reinsurer Swiss Re showed.
This was 22 percent below the $27 billion first-half average for the previous 10 years.
The findings come as reinsurance executives prepare for their annual get-together in Monte Carlo next month and at a time when they are facing calls from insurance company clients to lower prices.
Reinsurers such as Hannover and Swiss Re help their clients to cover claims from events such as earthquakes or floods in exchange for part of the premium.
Second-quarter figures showed that lower claims from natural disasters boosted reinsures' earnings. But this, coupled with signs of growing competition, has raised pressure on such companies to reduce prices.
The Swiss Re study showed that insurers covered nearly half of the $44 billion in estimated economic losses from natural catastrophes and man-made disasters in the first half of 2014.
Of that, $19 billion was for natural catastrophes, down from $21 billion over the same period last year. A spate of severe storms bringing large hail stones in May in the United States was the costliest event for insurers, with insured losses estimated at $2.6 billion.
A study last year from Munich Re, the world's largest reinsurer, found emerging countries are excessively affected by losses from natural catastrophes when measured in terms of their economic output.
(Reporting by Joshua Franklin; Editing by David Goodman)