Arabian Gulf flooding to hit reinsurance programs as loss figures reach into billions: Gallagher Re

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With torrential rains and deadly flooding impacting many Arabian Gulf countries between April 13-17, Gallagher Re estimates the market loss for United Arab Emirates (UAE) property to be in the range of $1.8 billion to $2.3 billion, while UAE Motor will fall between $350 million and 650 million.

gallagher-re-logoOutlining the particulars of the event, Gallagher Re explained that a strengthening area of low pressure and multiple rounds of thunderstorms, aided by warm waters in the Arabian Gulf, resulted in periods of heavy rainfall, frequent lightning, hail, and strong winds during April.

Multiple locations reportedly received more than a year’s worth of rainfall in less than 24 hours, and at least 33 fatalities were reported from the event: 19 in Oman, 8 in Iran, 5 in the UAE, and 1 in Yemen.

In re/insurance terms, Gallagher Re noted that the UAE was the hardest-hit country in the region and is expected to be where the majority of the total loss will stem from. Losses are also anticipated to hit reinsurance programs.

Meanwhile, Oman also had significant impacts, however, in terms of insured losses, these are expected to be minimal compared to the UAE. Similarly, Qatar, Bahrain, and Saudi Arabia have minimal losses.

Gallagher Re said that its $1.8 billion – $2.3 billion loss figure for the UAE includes facultative risks and is subject to change given the uncertainties surrounding the estimate.

Meanwhile, the firm’s UAE Motor figure of $350 million – 650 million includes comprehensive only, since third-party liability motor policies would not be covered. Gallagher Re added that due to the mobile nature of motors as well, there are additional uncertainties associated with this figure.

“The UAE had the highest rainfall in 75 years. Considering the rapid urbanisation that has occurred in major cities over the past few years, this leads to increased rainfall runoff, which increases flooding. Hence, these losses equate to an industry loss return period of at least 100 YRP,” Gallagher Re observed.

The post Arabian Gulf flooding to hit reinsurance programs as loss figures reach into billions: Gallagher Re appeared first on ReinsuranceNe.ws.

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