Property insurers in the London, European, and Bermuda markets took on more catastrophe risk between 2012 and 2015 for 1-in-100-year events amid favorable pricing conditions, but drew more of a line at the riskier 1-in-250-year events, according to a recent analysis from ratings firm A.M. Best.
Best evaluated the probable maximum losses (PMLs) for 25 of the largest rated insurers in the field and found that although catastrophe exposure grew, it did not exceed expected levels, given the increased use of alternative capital vehicles.
The firm noted in the report that when insurers could get a good price for catastrophe-exposed business, they were more willing to retain more risk while sending the 1-in-250-year risks toward the capital markets. They were also more willing to reinsure business as pricing conditions deteriorated toward 2015.
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Erin is the managing editor of Advisen’s Front Page News. She has been covering property-casualty insurance since 2000. Previously, Erin served as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at [email protected].
