Craig Swan, CEO, Bermuda Monetary Authority.
7 December 2022

Bermuda puts cost of Hurricane Ian at $13bn

Bermuda re/insurers estimate that they will incur gross claim losses of more than $13 billion in payments to policyholders and cedants in the US to cover the damaging effects of Hurricane Ian. The September 2022 hurricane made landfall in Florida and the Carolinas, causing catastrophic damage to property and loss of human life.

This loss estimate is according to commercial insurers’ market claims data collected by the Bermuda Monetary Authority (BMA) in November. The overall industry loss estimate for Hurricane Ian includes wind, storm surge and inland flooding losses in Florida, South Carolina, North Carolina, Georgia and Virginia.

Based on publicly available estimates from catastrophe risk modellers and insurance industry analysts, re/insurance losses resulting from Hurricane Ian are expected to total between $50 billion and $75 billion. Consequently, Bermuda re/insurers may incur as much as 25% of the industry losses, the BMA said.

Craig Swan, BMA chief executive officer, said: “The ability of US insurers to cede risk to Bermuda enables diversification of risk globally and it helps stabilise the cost of buying insurance—particularly property and catastrophe insurance—for customers living in catastrophe danger zones. Such a partnership bolsters policyholder protection and contributes to closing the protection gap.”

Bermuda re/insurers picked up 30% of hurricanes Harvey, Irma and Maria industry losses from the 2017 record-setting hurricane season; in 2021, they estimated paying 30% of Hurricane Ida losses and 20% of industry losses for the Texas Winter Storm Uri.

The BMA said 69 re/insurance companies responded to its US Data Claims Survey last month.