Reinsurers to swerve late March US tornado losses
German reinsurance giant's Clemens Jungsthöfel says the reinsurer is 'not really looking at a huge insurance event here based on early indications' relating to the convective storms that spawned deadly tornadoes in the south-east US between March 23 and 27
The losses from the deadly storms that hit the south-east US at the end of March are likely to remain below primary insurers’ retentions, Hannover Re CFO says
Reinsurers are likely to avoid losses from severe convective storms that struck parts of the US at the end of March.
Hannover Re chief financial officer, Clemens Jungsthöfel, said the losses, which could run to hundreds of millions of dollars, could remain within primary insurers’ retentions.
A series of convective storms spawned deadly tornadoes in the south-east US between March 23 and 27, which caused significant damage across the region and claimed at least 22 lives.
The damage was exacerbated by widespread hail and localised flooding from heavy rains.
“We are not really looking at a huge insurance event here based on early indications and the footpath losses might also stay within the retentions of primary insurers,” Jungsthöfel told analysts.
Hannover Re did not quantify its losses from the storms in its first-quarter results as they occurred after the company closed its books for the period, Jungsthöfel said.
The company’s net exposure to large losses in the quarter amounted to €334m against a budget of €356m. The gross exposure was €427m, meaning €93m of losses were ceded to retrocessionaires.
The largest individual losses were the earthquake in Turkey with net cost of €201m, as well as an intense cyclone and major flooding that affected New Zealand at a cost of €52m and €47m respectively.
Hannover Re has set a large loss budget of €395m for the second quarter, Jungsthöfel said.
