Fiji Time: 4:01 PM on Saturday 25 November

Fiji Times Logo

/ Front page / Archives » Article Index

Bid to raise rates

Saturday, October 28, 2017

INSURERS and reinsurers around the globe are looking to raise rates after what looks set to be their most costly quarter on record.

Hurricanes Irma and Maria alone caused as much as $US135 billion ($F279b) in insured losses, according to modeling firm AIR Worldwide. Earthquakes in Mexico could cost billions more.

As insurers report the full extent of the damage in their third-quarter results in coming weeks, investors will be looking for signs they can claw back some of those losses by raising premiums for customers.

"Having the chance of rate increases is quite attractive," said Mark Stoeckle, senior portfolio manager of Baltimore-based Adams Funds, which owns shares of Chubb Ltd, set to report earnings later on Thursday.

Over the next two weeks, other leading insurers and reinsurers are scheduled to report, including American International Group Inc, Allstate Corp, Swiss Re, Munich Re, Hiscox Ltd and Beazley Plc.

"The largest focus is on the pricing outlook," said Wells Fargo Securities analyst Elyse Greenspan.

Investors already appear to be banking on higher premium rates halting a gradual slide over the past few years.

The S&P 500 property and casualty insurance index fell about 10 per cent between mid-August and the end of the first week of September, as the scale of damage from Hurricane Harvey in Texas became apparent.

Since then, the index has recovered those losses and is now up about 5.5 per cent since August 17, on a par with the S&P 500. European insurance stocks followed a similar path: the STOXX Europe 600 Insurance index is up 4 per cent since August 17.

In the United States, Travelers Cos Inc and Hartford Financial Services Group Inc, which reported results ahead of their peers, have already said they will look to raise rates after big losses in the quarter.

In Europe, Hannover Re said it is considering a 40 per cent to 50 per cent increase in rates for North American regions recently hit by disasters.

A turnaround in prices would be the first major reversal since Hurricane Katrina in 2005, the costliest natural disaster in US history.

Aberdeen Standard Investments is looking to benefit from possible rate increases, said Russell Barlow, head of hedge fund investments at the Scottish firm.

Reinsurers which take on risk from other reinsurers, known as retrocessionaires, are "one of the most attractive routes to access the uplift in premiums," Mr Barlow said.

Fiji Times Front Page Thumbnail

Kaila Front Page ThumbnailFiji Times & Kaila Frontpage PDF Downloads

Use the free Acrobat Reader to view.

Code Inward TTs Outward TTs
CAD 0.62090.6019
JPY 54.904351.9043
GBP 0.36550.3575
EUR 0.41180.3998
NZD 0.71450.6815
AUD 0.64330.6183
USD 0.49000.4730



Exchange Rate updated on 24th, November, 2017

Today's Most Read Stories

  1. In the big league
  2. Picnic trip tragedy
  3. Big plan for hostel
  4. Police: Supervision at home important
  5. A-G clarifies NDP
  6. FSC's 5-year plan
  7. 10-day mission
  8. 649 sex offences against children
  9. Access to justice
  10. Roadworks go on

Top Stories this Week

  1. Celebration planned to welcome COP23 delegates Tuesday (21 Nov)
  2. Mystery writings Thursday (23 Nov)
  3. The Crying Rock Sunday (19 Nov)
  4. Bid to win Tuesday (21 Nov)
  5. 'God first' Sunday (19 Nov)
  6. Fiji Bati requests for continued prayers Monday (20 Nov)
  7. A-G clears the air on welcome ceremony Friday (24 Nov)
  8. Bati rest day Tuesday (21 Nov)
  9. Bati's best Thursday (23 Nov)
  10. Bati hopes to rise again Thursday (23 Nov)