GONZALO WILL NOT HAVE RATING IMPACT FOR BERMUDA’S DOMESTIC INSURERS, AM BEST REPORTS

AM Best has said it does not expect the impact of hurricane Gonzalo to trigger any rating actions for Bermuda’s domestic insurers. The rating agency said Bermuda’s domestic firms are estimating the combined insured loss of Gonzalo and tropical storm Fay, which passed over the island a week earlier, will be in the $50m to $150m range. This is below the £200m to $400m estimate from AIR Worldwide, and AM Best said Bermuda’s domestic players will likely only absorb a small portion of the losses. The rating agency said the brunt of the storm’s financial impact will fall on the reinsurance market as primary insurers on the island are heavily reinsured with only small and manageable retentions. “Building codes on the island are very strict allowing for safer structures that can withstand sustained winds of over 100 mph. The superior construction requirements set by Bermuda’s building authority were proved effective by the lower than expected damage left behind by Hurricane Gonzalo,” the rating agency said.