“Globally, we see ~$27bn of insured losses, with the US generating ~$17bn of the losses, which is modestly below the 10-year 3Q average,” suggest analysts at Goldman Sachs.
According to the firm’s analysts, the majority of the US quarterly losses stemmed from the wildfires in Hawaii, and the impacts of Hurricane Idalia, Hurricane Hilary, and various floods.
Meanwhile, internationally, Goldman Sachs said the majority of losses from a combination of the earthquake in Morocco, typhoons near Japan, and flooding in multiple countries.
“Of the data used to aggregate catastrophe loss estimates, we have noticed the overall dollar value borne by insurers has increased significantly despite the count of weather events (accumulated by NOAA data) which implies a lower-than-average year,” the analysts explained.
They continued, “We attribute this to 1) increased severity and rising loss costs contributing to larger payouts on claims from these storms, and 2) changes in retention of secondary perils where reinsurers have borne the bulk of the losses over the past few years, allowing primaries to offer broad coverage since the risk was shared.”
Goldman Sachs analysts noted that NOAA data indicates above-quarter impacts, primarily from elevated wind storms for the quarter, particularly in July and August when compared to the past year and the five-year historical average.
Partially offsetting this, September tornados were “well below” the past year and five-year historical average.
The analysts concluded, “Despite the monthly tabulation being above the historical averages across all three perils (Hail, Tornado, and Wind), these findings are not consistent with the actual losses incurred within the ALL and PGR monthly catastrophe losses, where when excluding large catastrophe basis, the total dollar amount paid was below the quarterly average.”
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