Lower catastrophe losses in the US during 2013 are expected to yield strong underwriting profitability in the coming year, according to a presentation at the Captive Insurance Companies Association International Conference in Scottsdale, Arizona.
While natural cat losses, such as those caused by hurricanes, adhered to the status quo during the first half of 2013, the number of cat losses decreased drastically from 2012 in Q3 and Q4.
Over the decades, the US has traditionally been affected by more than two thirds of natural cat losses, but 2013 saw a shift in the balance. Due to extensive flooding in countries such as Germany and the UK in 2013, the largest proportion of cat losses were felt in Europe.
This profitability is expected to be offset, however, by declining rates as a result of business shifting to offshore domiciles and alternative insurance vehicles.
Cat losses for natural disasters increased worldwide in 2013 while losses from man-made events decreased. This trend is expected to continue in 2014, with natural cat losses projected to increase overall in the long-term.
