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A number of insurers and reinsurers in Britain and elsewhere
have issued profit warnings following catastrophes such as
hurricanes in the U.S. and Caribbean, earthquakes in Mexico and
wildfires in California this year.
Hurricanes Harvey, Irma and Maria are expected to cause at least
$100 billion in insured losses, reinsurers and modeling agencies
say, compared with losses of about $74 billion caused by
Hurricane Katrina in 2005.
The UK general insurance sector showed it was resilient in
stress tests carried out by the Bank of England, it said in a
letter to chief executives published on its website.
But scenarios to test risks such as flooding following
hurricanes or tsunamis after earthquakes showed "few firms go
beyond a simple loading to reflect weaknesses", it said.
"Boards are encouraged to understand what the limitations are
with the catastrophe modeling, and their inherent uncertainty
when applicable, especially for their key perils," the Bank
said.
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