International Insurers, Reinsurers to Shoulder Half of Sandy Losses

International insurance and reinsurance companies are expected to cover half of total insured losses from Superstorm Sandy, an industry association said.

Estimated losses from Superstorm Sandy currently stand at over $16 billion, as reported by publicly traded companies, according to the Association of Bermuda Insurers and Reinsurers (ABIR). Regardless of the final totals, international insurers and reinsurers are expected to cover roughly 50 percent of the losses — estimated currently at more than $8 billion and potentially reaching an estimated $10 billion, the group said.

Sandy underscores the important role that international reinsurers play in times of crisis, said Brad Kading, president and executive director for the ABIR.

“Global reinsurers are financially strong and have substantial capacity to support U.S. insurance companies as they review their portfolios in light of claims,” he said.

“In fact, Bermuda’s reinsurers are the largest suppliers of catastrophe reinsurance to U.S. insurers and have an excellent record of claims payment. With the potential losses from extreme weather on the rise, the need for global reinsurance will continue to expand.”

Kading pointed to a recent report by the catastrophe risk management firm Karen Clark & Company that warns the United States can expect insured losses of at least an average of $10 billion from a hurricane every four years. The Karen Clark report was based on an analysis of more than a century of hurricanes.

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