Kevin O’Donnell, the Chief Executive Officer (CEO) of Bermuda headquartered reinsurer RenaissanceRe, expects losses related to severe convective storms (SCS) in the U.S. during the second-quarter of 2023 to approach $30 billion.
Speaking recently during the reinsurer’s Q2 2023 earnings call, O’Donnell commented on the most active second-quarter of catastrophe losses in the U.S. since 2011, driven by the SCS peril.
Brokers Aon and Gallagher Re have both highlighted the significant impact of the peril during the first-half of 2023, with the latter reporting that of the $52 billion insured loss total for the six-month period, as much as 65% relates to severe convective storms.
During the RenRe call, O’Donnell noted that public reports of SCS losses in the U.S., in Q2 alone, are already exceeding $20 billion.
Highlighting just how active it has been, he went on to say that once the quarter is fully closed, RenRe expects this figure “could approach $30 billion.”
“These events were localised and at least three are likely to exceed $4 billion in industry loss,” continued O’Donnell.
These potential loss figures from the SCS peril in the U.S., in a single quarter, are huge.
“Taken together, it’s not surprising that at least some of this loss would impact reinsurance,” said O’Donnell.
As noted by the RenRe CEO, with these losses being so high, it’s likely that reinsurers will bear some of the costs, and this is despite a move away from frequency events in recent times as a result of elevated losses from these types of events.
Against this backdrop, O’Donnell remains pleased with the performance of RenRe’s property segment in Q2, with the property cat portfolio reporting underwriting income of $211 million, which is higher than last year.
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