The historic four elements of earth, air, fire and water all hit the world of insurance and insurance-linked securities (ILS) in 2017, according to Greg Wojciechowski, president and CEO of the Bermuda Stock Exchange (BSX) and also chair of ILS Bermuda.
Speaking to attendees at the ILS Convergence 2017 conference in Hamilton, Bermuda on October 18, Wojciechowski said that the four elements summed up the catastrophes of 2017 so far. “In the last 60 days we have born witness to unprecedented winds and floods, a devastating earthquake and truly catastrophic fires.”
Summarising recent events, he said that Hurricane Harvey had gotten the ball rolling, followed by Irma and Maria, all of which had set new records in terms of their nature and the amount of flood and wind damage they had done. These had been followed by the earthquake in Mexico, the wildfires in California and also Europe and finally Hurricane Ophelia, which had struck Ireland and which removed any doubt that 2017 has been a record-breaking season, as the last was the tenth consecutive Atlantic named storm to reach hurricane status, matching the all time record which last occurred over 120 years ago in 1893.
Wojciechowski told delegates that it was important to focus on the role that Bermuda plays in helping to pick up the pieces after these events.
He pointed to the recent initial estimate by the Association of Bermuda Insurers and Reinsurers (ABIR) that up to a quarter of the estimated $100 billion in losses from Hurricanes Harvey, Irma and Maria will be paid by Bermuda’s re/insurers, adding that ABIR also highlighted the growing importance of the ILS market.
“Bermuda’s role at the forefront of risk innovation and global role in ILS is evident in the numbers that we’re reporting,” Wojciechowski said. “For example the BSX has recorded a record number of ILS listings in 2016 and now continues on into 2017. As of June this year we had 211 listed issuers that had ILS focus and taking the overall value of those securities to nearly $22 billion in listed securities.”
Wojciechowski pointed out that natural catastrophes were never going to go away, and that the market had two options. One was to run for the hills and hide, or the market could continue to develop the insurance, reinsurance and alternate risks markets to ensure that they are better equipped to provide innovative risk solutions so that the wheels of commerce would continue to turn when disaster strikes, and that the Convergence 2017 event would look at those solutions.
Bermuda Stock Exchange, Greg Wojciechowski, ILS Convergence 2017, Bermuda