December 2, 2009 by Canadian Underwriter
The year 2009 will go on record as the quietest in the Noughties (the first decade of millennium) for windstorm activity, reports Lloyd’s.
In total, there were only nine named storms, three hurricanes and two major hurricanes in 2009. This activity was far below the average for 1995-2008 (61%, 38% and 51% respectively).
The benign storm season allowed insurers to reload some of their capital in the run-up to the Jan.1, 2010 renewals, but the industry’s capital supply position is not assured, cautions Paul Nunn, head of exposure management at Lloyd’s.
“Many insurers are sitting on profits made because of the benign cat season — but they should be asking if they could easily reload if a big cat hits in 2010,” Nunn said.
He advises insurers to remain diligent over exposure management.
“Don’t be complacent,” he said. “It is easy to allow the impact of cats to fade from memory.
“Better organizations take the time afforded by not having an event to develop their understanding of modelling and portfolio risk management. Weaker organizations only learn their lessons when they have to write out the big cheques.”