Quantum of Helene & Milton loss similar to Ian, slight softening still expected at Jan renewals: JP Morgan

In its recent Love Actuary report, JP Morgan compared losses from Hurricane Ian in 2022 with the total claims emerged from Hurricanes Helene and Milton in 2024 so far, noting that the total quantum of loss is similar.

Despite these hurricane losses, analysts highlight the notable shift in the reinsurance market in early 2023, marked by substantial increases in both pricing and attachment points.

As a result, with higher prices and a larger share of losses absorbed by primary insurers, the reinsurance market is expected to be in a stronger position than in previous years, which has been reflected in recent results, leading JP Morgan to still expect slight softening in prices at the upcoming January renewals.

Hurricane Ian led to approximately $50 billion in industry losses in 2022, while Helene and Milton have generated close to $45 billion in combined claims this year.

Analysts observed that, in many cases, losses from Helene and Milton were lower than those from Ian, partly due to retrenchment in certain parts of the market, such as Berkshire Hathaway and AXA. However, some companies experienced higher losses from Helene and Milton, reflecting market growth and other factors.

Total claims expenses for companies that have reported so far are approximately two-thirds of the level seen for Hurricane Ian.

JP Morgan observed that, when comparing market shares from Hurricane Ian to those from Hurricanes Helene and Milton combined, some companies’ shares have increased, while others have declined. The market shares for Hiscox and Lancashire are broadly similar to those in 2022, with the exception of Beazley, which has significantly expanded its property (reinsurance and insurance) portfolio, nearly doubling its topline over the past two years.

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