Bermuda Market May Experience $2.7 Billion in Winter Storm Uri Losses

Two snowplows on a road during a winter storm

July 29, 2021

Two snowplows on a road during a winter storm

Bermuda insurers and reinsurers estimate that they will incur gross claims losses of $2.7 billion in payments to US policyholders and cedants to cover claims related to damage from Winter Storm Uri, according to the Bermuda Monetary Authority (BMA).

The February storm caused severe losses across the southern United States, particularly in Texas.

The loss estimate is based on commercial insurance market claims data collected by the BMA in May. As of March 31, Bermuda reinsurers had paid $62 million in losses associated with Winter Storm Uri.

The BMA said that publicly available estimates from catastrophe risk modelers and insurance industry analysts suggest that insurance and reinsurance losses resulting from Uri are expected to be in the $10 billion to $20 billion range. Bermuda (re)insurers might ultimately incur as much as 20 percent of the total industry losses resulting from the winter storm, the BMA said.

"The $2.7 billion or potentially 20 percent of Winter Storm Uri losses expected to be incurred by Bermuda (re)insurers demonstrates the key role Bermuda plays in the supply of risk capacity to the United States," Gerald Gakundi, director of insurance supervision at the BMA, said in a statement. "These survey results, together with the BMA's 2017 survey, which revealed that Bermuda reinsurers picked up 30 percent of the Hurricanes Harvey, Irma, and Maria industry losses from the 2017 record-setting hurricane season, show the significance of the Bermuda (re)insurance market's contribution to the United States."

The BMA said the Winter Storm Uri loss information comes from its US Data Claims Survey completed in May. The loss information includes both direct insurance and reinsurance, with 42 commercial (re)insurance companies responding to the survey.

July 29, 2021