Results 1 to 2 of 2


  1. #1
    Gold Member Phil Cooper's Avatar
    Join Date
    Nov 2010
    Thanked 170 Times in 118 Posts


    Hurricane Sandy continues to take its toll, with latest estimates putting insured losses at $US20-25 billion ($19.3-24.1 billion).

    The figure, provided by catastrophe modeller RMS, is backed by local insurer QBE, which has a substantial business in the US.

    QBE shares took a hammering last week after it revealed its losses would be $350-$450 million. CEO John Neal says the company “supports the analysis that suggests the insured losses from this storm could exceed $US20 billion”.

    In terms of losses to private insurers and the US Government, which covers residential flood losses through its National Flood Insurance Program (NFIP), Sandy is expected to be the second-costliest natural catastrophe in US history, behind Hurricane Katrina.

    The final insured loss remains uncertain but ratings agency Standard & Poor’s (S&P) says it would have to exceed $US50 billion ($48.2 billion) for the storm to have a “material impact” on capital in the reinsurance sector.

    “The reinsurance sector’s strong capital and very strong earnings thus far in 2012 will allow it to withstand losses well outside the range of current estimates,” the agency’s report says.

    “On the whole we continue to believe Superstorm Sandy will be an earnings event for the sector and will have a limited impact on our ratings on global reinsurers.”

    The uncertainty about total insured loss stems from Sandy’s “unusual characteristics and coverage complexities”, S&P says.

    While catastrophe models capture traditional risks such as wind damage and flood, unique features such as widespread power outages, the high tide leading to a significant storm surge, disruption of transport infrastructure and the flooding of New York subways and road tunnels are “not fully reflected in vendors’ loss estimates”, the agency says.

    The wind versus flood damage debate is also causing the usual confusion, but a report by reinsurance broker Willis Re says only minor damage can be attributed to wind.

    Further complicating the situation are calls from US regulators for insurers to avoid applying hurricane deductibles to damaged properties because the National Weather Service ruled the storm was a post-tropical cyclone rather than a hurricane at the time of landfall.

    S&P says this decision could increase insured losses by 30-50%.

    Meanwhile, the US Federal Emergency Management Agency (FEMA), which administers the NFIP, says it may need a congressional bailout of its flood insurance operations.

    FEMA Deputy Associate Administrator for Federal Insurance Edward Connor says claims from Sandy could be four times greater than the NFIP’s capacity.

    The NFIP has $US2.9 billion ($2.8 billion) in borrowing capacity but it estimates Sandy-related losses of $US6-12 billion ($5.8-11.6 billion).

  2. #2
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Durban, South Africa
    Thanked 2,476 Times in 2,080 Posts
    Blog Entries
    The bigger the numbers, the bigger the magnifying glass that's used to read the fine print.
    The trouble with opportunity is it normally comes dressed up as work.

    Alcocks Electrical Services | Alcocks Pest Control & Entomological Services

Similar Threads

  1. Hurricane Sandy
    By cyppok in forum General Chat Forum
    Replies: 7
    Last Post: 12-Nov-12, 04:22 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts