Hurricane

High retentions on insurers' catastrophe treaties will shield reinsurers from the brunt of Hurricane Harvey claims, although there could be some cessions.

Florida is truly the reinsurance market's risk hothouse. Its coastline produces the bulk of the ILS market's exposure, and Florida risks still squeeze out more profit for reinsurers than many other lines of business

The risk of Hurricane Irma's US landfall has now risen to 75-80 percent, JLT Re said in an update published late on Monday.

There is now an increased chance of seeing some impacts from Irma in the Florida Peninsula and Florida Keys later this week and this weekend, the National Hurricane Center (NHC) has said in its latest forecast discussion on the storm.

Modelling firm RMS has estimated that losses accrued by the National Flood Insurance Program (NFIP) will be between $7bn and $10bn.

Hurricane Harvey's impact on Texas could potentially produce an underweight loss for the ILS market relative to the broader reinsurance sector.

Hurricane Harvey had much less of an impact on the cat bond market than last year's Matthew, but its quick intensification also left less time for livecat traders to manoeuvre ahead of the event.

The largest component of Harvey's damage will stem from flooding in the Houston area, so who is going to take those losses?

Hurricane Harvey will impact reinsurer earnings but is unlikely to spur a reversal in softening pricing, analysts said.

Hurricane Harvey may put pressure on earnings and performance for regional property and auto writers but it will not be a capital event for the commercial segment overall, said AM Best in a report on the storm.

This is certainly not going to be a year where the reinsurance industry is twiddling its thumbs at the annual Monte Carlo Rendez-Vous.

The major continental carriers and dominant catastrophe writers are likely to be among the key reinsurers of the regional and specialist insurers exposed to Hurricane Harvey claims.