FEBRUARY 13, 2020 01:57 PM (EST)

AM BestTV: Australian Fires Could Impact Earnings, Reinsurance Markets, Says AM Best Associate Director

 Lee McDonald
Group Vice President, Publication and News Services
+1 908 439 2200, ext. 5561


OLDWICK - FEBRUARY 13, 2020 01:57 PM (EST)
In this episode of AMBestTV, AM Best Alex Rafferty, associate director, analytics, said many Australian insurers appear positioned to absorb losses from the recent bushfires, but the fires could affect earnings and reinsurance renewals. Click on http://www.ambest.com/v.asp?v=australiabushfire220 to view the entire program.

Estimated losses from the ongoing Australian bushfires stands at AUD 2.2 billion (USD 1.5 billion), but is expected to increase.

“Ultimate loss estimates may take some time to be determined; however, it is clear that the current bushfires will be one of the costliest on record in terms of the volume of insured losses and from a property damage point of view,” said Rafferty.

Rafferty also addressed the capabilities of the Australian insurers to manage these losses.

“AM Best is of the view that insurers are well-placed to withstand these losses. In recent years, Australian insurers have demonstrated their ability to absorb natural catastrophe event losses. This is reflected in their strong capital positions and the support they receive from their reinsurance partners,” he said.

Additionally, Rafferty believes that the reinsurance market could be impacted by the bushfires.

“Meaningful losses passed on to reinsurers could result in upward pressures on reinsurance rates, as well as potential timing on terms and conditions, on upcoming renewals.”

To access a copy of this commentary, titled, “Australian Insurers Able to Contend With Mounting Bushfire Losses,” please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=293900

Recent episodes of AMBestTV include:

  • Coronavirus Affecting China Economy, Earnings, Say AM Best Analysts: AM Best Asia-Pacific analysts Christie Lee, senior director, analytics, and James Chan, senior financial analyst, said the coronavirus outbreak is slowing China’s economy, reducing insurance sales and impacting investment income: http://www.ambest.com/v.asp?v=chinacoronavirus220 .

  • Innovation Important, but Only One Element of Evaluation, Says AM Best Managing Director: At the St. Joseph’s University’s InsurTech Symposium in Philadelphia, PA, John Andre, managing director, AM Best, discusses the credit rating agency’s approach to innovation, but added that rating evaluations also focus on items that include performance, business profile, risk management and capitalization: http://www.ambest.com/v.asp?v=andre220 .

  • IFRS 17 Will Present a Clearer View of Insurers, Says AM Best Associate Director: Tony Silverman, associate director, AM Best, said the change to IFRS 17 accounting standards is not expected to have a near-term impact on insurers’ credit ratings: http://www.ambest.com/v.asp?v=ifrs170120 .

AM BestTV covers exclusive AM Best and insurance industry information and reports, targeted topics and key developments in the insurance, reinsurance and related sectors daily. Sign up for alerts of episodes at www.ambest.com/multimedia/ambtvsignup.html . View AM BestTV episodes at www.ambest.tv .

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 New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.