17 October 2016News

Hurricane Nicole’s direct hit on Bermuda to affect reinsurance market

The reinsurance market will be affected by insured losses from damage on Bermuda following Hurricane Nicole, according to an AM Best briefing.

Hurricane Nicole hit Bermuda on October 13, 2016, as a Category 3 hurricane. The centre of the storm passed closely over the island, causing Bermuda to experience sustained winds of 120 mph, heavy rains, widespread power outages and significant coastal flooding as a result of storm surge.

The Best briefing, titled “Bermuda property/casualty insurers likely to look to reinsurers in the wake of Hurricane Nicole,” notes that primary domestic property/casualty insurers are heavily reinsured with manageable retentions.

AM Best anticipates that domestic insurers will be insulated from any major financial impact resulting from the storm, given their extensive use of property quota share reinsurance.

However, the report also emphasises that the event does not represent a material financial impact and should be easily absorbed by reinsurers.