LONDON - Wednesday, April 6th 2016 [ME NewsWire]
(BUSINESS WIRE)-- Recent flooding in the United Arab Emirates (UAE), particularly in Abu Dhabi, has highlighted the need for regional insurers to assess and manage their exposure to this category of catastrophe event.
In a new Best’s Briefing, “Flood Risk in the Gulf Cooperation Council – An Underestimated Catastrophe?” A.M. Best notes that while the Gulf region has thus far experienced very little damage from wind and earthquake events, floods as a result of storm surges, cyclones and flash flooding are a regular occurrence. These events can impact an insurer’s operating results and balance sheet strength through a number of exposures. Property and engineering books can be affected by structural damage to buildings and for contents through inventory and raw material losses. However, the most critical risks that can affect an insurer’s performance are motor damage and business interruption. Michael Dunckley, financial analyst, said: "Insurers’ exposure to flood events, at least on their property books, is limited by the low level of insurance penetration for personal property, and home contents insurance in particular. As a result, total insured losses resulting from these events have been low so far and headline figures for economic damage have largely not been passed on to insurers. However, as insurance awareness and penetration increases across the GCC, exposures are likely to increase, making this a greater risk for insurance companies."
A.M. Best's briefing also notes that it is not currently typical for insurers to maintain accumulation records in respect of potential flood exposures. As flood risk represents an emerging threat in an otherwise benign region for natural hazards, and with insurance penetration increasing and risks transferred from individuals and businesses to the insurance sector, considerable accumulation of exposures will be created. In order to protect their balance sheets, A.M. Best believes that insurers will need to monitor the exposures created by their portfolios and adjust their underwriting and reinsurance strategies to accommodate the risk.
To access a complimentary copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=247552.
A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates.
ALL RIGHTS RESERVED.
Contacts
A.M. Best Company
Michael Dunckley, +44 20 7397 0321
Financial Analyst, Analytics
michael.dunckley@ambest.com
Jim Peavy, +1-908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
Edem Kuenyehia, +44 20 7397 0280
Associate Director, Market Development & Communications
edem.kuenyehia@ambest.com
Permalink: http://www.me-newswire.net/news/17529/en
(BUSINESS WIRE)-- Recent flooding in the United Arab Emirates (UAE), particularly in Abu Dhabi, has highlighted the need for regional insurers to assess and manage their exposure to this category of catastrophe event.
In a new Best’s Briefing, “Flood Risk in the Gulf Cooperation Council – An Underestimated Catastrophe?” A.M. Best notes that while the Gulf region has thus far experienced very little damage from wind and earthquake events, floods as a result of storm surges, cyclones and flash flooding are a regular occurrence. These events can impact an insurer’s operating results and balance sheet strength through a number of exposures. Property and engineering books can be affected by structural damage to buildings and for contents through inventory and raw material losses. However, the most critical risks that can affect an insurer’s performance are motor damage and business interruption. Michael Dunckley, financial analyst, said: "Insurers’ exposure to flood events, at least on their property books, is limited by the low level of insurance penetration for personal property, and home contents insurance in particular. As a result, total insured losses resulting from these events have been low so far and headline figures for economic damage have largely not been passed on to insurers. However, as insurance awareness and penetration increases across the GCC, exposures are likely to increase, making this a greater risk for insurance companies."
A.M. Best's briefing also notes that it is not currently typical for insurers to maintain accumulation records in respect of potential flood exposures. As flood risk represents an emerging threat in an otherwise benign region for natural hazards, and with insurance penetration increasing and risks transferred from individuals and businesses to the insurance sector, considerable accumulation of exposures will be created. In order to protect their balance sheets, A.M. Best believes that insurers will need to monitor the exposures created by their portfolios and adjust their underwriting and reinsurance strategies to accommodate the risk.
To access a complimentary copy of this briefing, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=247552.
A.M. Best is the world's oldest and most authoritative insurance rating and information source. For more information, visit www.ambest.com.
Copyright © 2016 by A.M. Best Company, Inc. and/or its affiliates.
ALL RIGHTS RESERVED.
Contacts
A.M. Best Company
Michael Dunckley, +44 20 7397 0321
Financial Analyst, Analytics
michael.dunckley@ambest.com
Jim Peavy, +1-908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com
Edem Kuenyehia, +44 20 7397 0280
Associate Director, Market Development & Communications
edem.kuenyehia@ambest.com
Permalink: http://www.me-newswire.net/news/17529/en
No comments:
Post a Comment