Nov 29 - For the reinsurance industry, 2011 was a record-breaking year, with
$105 billion in natural catastrophe insured losses globally. Up until just a few
weeks ago, it seemed that 2012 would be relatively uneventful.
In a recent report, "Reinsurance Industry Leaders Discuss Lessons Learned From
Hurricane Sandy," published Nov. 29, 2012, on RatingsDirect, Standard & Poor's
Ratings Services says that reinsurers had three very good quarters until
Superstorm Sandy hit the U.S. East Coast on October 29. Their operating
performance will certainly be less strong in the storm's wake. But, according
to panelists at the Bermuda Reinsurance 2012 conference sponsored by Standard
& Poor's on Nov. 13-14, 2012, the storm's legacy will be less about
fourth-quarter results and more about the lessons learned--and the effect
they'll have on the industry going forward.
The market appears to be having trouble reaching a consensus about what total
insured losses will be post-Sandy. That these calculations can still be
unclear so long after the storm highlights how difficult it can be to plan
ahead for these events. The fact that Sandy hit New York City, with its dense
population and high concentration in the financial markets, will be a big part
of the storm's legacy in the reinsurance industry.
Credit analyst Taoufik Gharib, director at Standard & Poor's, moderated the
discussion, covering topics such as judging the financial success of a
company, reinsurers' investment strategies in the current market, and the
importance of enterprise risk management.
The report is available to subscribers of RatingsDirect on the Global Credit
Portal at www.globalcreditportal.com. If you are not a RatingsDirect
subscriber, you may purchase a copy of the report by calling (1) 212-438-7280
or sending an e-mail to firstname.lastname@example.org. Ratings
information can also be found on Standard & Poor's public Web site by using
the Ratings search box located in the left column at www.standardandpoors.com.