Companies writing property catastrophe reinsurance saw strong operating performances in 2003 despite higher insured catastrophe losses in the US, said Standard & Poor’s (S&P).
In its Property Catastrophe Insurers Worldwide Perform Strongly in 2003 report, S&P said it expected the high level of earnings to continue.
In the US, measured insured losses from catastrophes were $12.8bn in 2003, making the year the third costliest since 1994, said S&P.
But it said operating performance was very strong due to the reinsurance of US risks in other global markets. “As a result, losses incurred in the US were mitigated by a diverse catastrophe portfolio that, in aggregate, performed well.
Many catastrophe reinsurers writing business in the US write at high layers and so were not significantly affected by the events in 2003, said the company.
With the cycle in a downward trend, S&P said it was focused on those companies with the discipline to reduce exposure and writings.
But any large catastrophe in 2004 could harden the market and spawn another class of new start-ups, warned the S&P.
