Climate, reinsurance and cybersecurity remain top risks for rated Caribbean insurers – InsuranceNewsNet

OLDWICK, NJ–(BUSINESS WIRE)–
AM Best-rated Caribbean P&C insurers post net income up 8% in 2021 to more than $70 millionhighlighting transporters’ risk management practices, although the region remains highly vulnerable to a number of risks, including climate risk.

in a new Best Market Segment Report“Climate, reinsurance and Cyber ​​stays high in the Caribbean Risk Landscape,” AM Best says that while carriers have generally overcome a number of hurdles created by COVID-19, the pandemic has highlighted the region’s vulnerabilities. This was particularly evident in its heavy reliance on external demand to fuel economic growth and the undiversified nature of many economies, which depend on foreign exchange activities such as tourism, financial services and commodity exports. base.

Climate risk adds an additional layer of uncertainty as it remains the greatest threat to the Caribbean. Despite the low level of catastrophe claims activity in 2021 and so far in 2022, reinsurance pricing continues to reflect increased tightening as insurers and reinsurers feel the effects of inflation.

“The increasing frequency and severity of global catastrophic events has forced reinsurers to take a more circumspect approach to climate risk,” said Ricardo Longchallon, senior financial analyst. “In some cases, this has led to a double risk for Caribbean insurers in the form of higher reinsurance rates, in some cases above 15%, and less capacity.

Despite the ongoing recovery, tourism’s contribution to GDP remains below pre-COVID levels and it will likely take years to return to pre-pandemic levels. Despite an improvement in 2021, tourism’s contribution to GDP is still much lower than in 2019.

Consolidated gross premiums among policyholders Caribbean P&C insurers rose 10.6% in 2021, reflecting continued price firming in some territories, while net premiums rose 5.3%, despite higher cessions by some companies. The overall combined ratio deteriorated slightly, to 95.3 from 94.8 in 2020, which had improved by 4.1 percentage points compared to 2019. The consolidated surplus increased by 3.2% compared to compared to 2020 for $853.9 billionreflecting the group’s favorable results in 2021.

Caribbean life/health insurance companies saw a slight improvement in revenue growth after emerging from the pandemic-related disruptions, with total revenue increasing slightly. Life and health insurance premiums stabilized as insurers no longer had to offer premium relief to policyholders as economic conditions improved, home care restrictions eased and the tourism has reversed.

To access the full copy of this market segment report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=323204.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Based at United Statesthe company does business in more than 100 countries with regional offices in London, amsterdam, dubai, hong kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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Ricardo Longchallon
Senior Financial Analyst

+1 908 439 2200 ext. 5676

[email protected]

Anne Modica
Associate Director

+1 908 439 2200 ext. 5209

[email protected]

Christopher Sharkey
Manager, Public Relations

+1 908 439 2200 ext. 5159

[email protected]

Jeff Mango
General director,

Communications Strategy

+1 908 439 2200 ext. 5204

[email protected]

Source: AM Best