Despite the third quarter’s flurry of US and Asia cat events, Flandro said that the scale of ample capacity fighting fiercely for risk is once again overshadowing discussions of any raising of rates at 1.1.
“The losses of the third quarter were significant, there’s no doubt about it,” Flandro said.
“It bears remembering that as we entered the quarter we had close to $340bn of capital dedicated in the reinsurance sector on $265bn of life and non-life premium – that’s a lot more supply than demand.”
With industry loss estimates currently being pegged at around $10bn each for both Michael and Jebi, Flandro said 2018 still had the potential to be an “above average cat year”.
However, although it was big quarter for losses, 2018 looks like it “won’t be anything close” to 2017, Flandro said, which was the largest insured loss year on record.
“That said, with all of the losses in the quarter, particularly Michael, Florence, and the Japanese cat losses will make 2018 an average loss year, possibly even a slightly above average,” he added.
“With all the excess supply we have in the sector it may bear up demand a little bit but compared to supply the pressure is still very much going to be one way.”