Bermuda’s Hurricane Gonzalo unlikely to have ratings impact for domestic insurers

A.M. Best is not expecting any rating changes for Bermuda’s domestic insurers as a result of Hurricane Gonzalo, which made landfall on the island as a Category 2 storm on Oct. 17.

AIR Worldwide has placed loss estimates for the storm at between $200 million and $400 million, while domestic insurers are estimating that combined insurable losses from Hurricane Gonzalo and Tropical Storm Fay will be between $50 million and $150 million, according to A.M. Best.

“Bermuda’s primary insurers are likely to absorb only a small portion of the losses,” the rating agency noted. “A.M. Best expects that the brunt of the storm’s financial impact will fall on the reinsurance market since primary insurers on the island are heavily reinsured with small and manageable retentions.”

Strict building codes and superior construction requirements in Bermuda have helped mitigate losses, the firm said. 

Shortly after the storm, Fitch Ratings also reported that the storm was unlikely to challenge soft pricing.