Canadian Underwriter

Despite destruction, low penetration means low insured losses after typhoon Haiyan

November 13, 2013   by Canadian Underwriter

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Insured losses from super typhoon Haiyan are expected to be minimal because of low non-life insurance penetration, “significantly less than 1% of gross domestic product,” according to a new briefing from rating agency A.M. Best.

The firm notes one preliminary estimate that has placed total economic losses at $14 billion and insured losses at $2 billion, but notes that it’s too early to have reliable figures.

Catastrophe modelling firm EQECAT also noted the low insurance penetration in its own alert on Tuesday. “Although there is a probability of high value single facility insured loss, the aggregate insured loss from this event is not expected to exceed $100 million USD,” it said.

Despite the massive destruction caused by the storm, A.M. Best said it doesn’t expect any rating actions from the event.

“A.M. Best expects Haiyan to be an earnings event for reinsurers – minor for the large, global companies but more substantial for smaller, regional players,” the agency also said.

“However, for the larger reinsurers it is yet another loss on top of recent catastrophes in Europe, including hailstorms; floods in Germany and the Slavic countries; and last month’s St. Jude storm that struck both the United Kingdom and the Continent.”