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Asian cat losses may hit reinsurance market

November 6, 2018

Asia-Pacific reinsurance buyers may see knock-on effects from the spate of natural disasters that have hit the region in the past few months, Guy Carpenter says.

But abundant market capacity may temper this, extending a year of favourable conditions for catastrophe reinsurance buyers.

“The region has experienced losses during the year to date, and… it is expected that a proportion of these will impact reinsurers,” the reinsurance broker says.

“The effect of [this year’s] losses on market sentiment going forward is not fully understood.”

Losses from Typhoon Jebi, earthquakes and other natural disasters may push the combined operating ratio for catastrophe reinsurance in the region to 100-200%.

But that would be significantly lower than in 2011, when the ratio exceeded 900%.

Jebi, Japan’s worst storm in 25 years, was the largest event in the Asia-Pacific region.

Guy Carpenter expects the Australian reinsurance market to remain stable in light of a benign catastrophe season so far.

Prices remain in buyers’ favour and only a “really big Australian catastrophe” can move the market, Life and Capital Asia MD Matthew Rose told insuranceNEWS.com.au. 

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