Best’s Commentary: Tornado Outbreak Adds to 2021 Insurance Losses, but Appears to Be Earnings Event
OLDWICK, N.J.–(BUSINESS WIRE)–#insurance–Although AM Best expects insurance companies to be able to absorb the losses from the recent and deadly U.S. tornado outbreak, supply chain challenges and inflationary pressures may exacerbate insurance losses.
AM Best’s initial viewpoints regarding the tornado outbreak across central and southern US states, which as detailed in its Best’s Commentary, “Tornado Outbreak Adds to 2021 Insurance Losses, but Appears to Be Earnings Event,” also include:
- The severe damage from the tornadoes will dampen underwriting results for U.S. property/casualty insurers, which already have seen severe weather-related losses in 2021.
- This tornado event is an outlier in terms of insurance events for December, which tends to experience low weather-related losses.
- The growing number of tornadoes and severe weather events will lead to a re-examination of pricing and supply of aggregate reinsurance protection.
Ultimately, AM Best expects insured losses to be concentrated in the commercial multiperil and homeowners lines, with some losses borne by auto physical damage as well. Given the industry’s robust capitalization and risk management techniques, the outbreak likely will be an earnings event for the industry. In particular, the Kentucky insurance market is not concentrated, and so losses may be spread out among insurers. AM Best will monitor affected insurance companies as more clarity on losses becomes apparent.
To access the full copy of this report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=XXXXXX.
AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.
Copyright © 2021 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.
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