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FOR IMMEDIATE RELEASE
OLDWICK - OCTOBER 31, 2014 02:35 PM (EDT)
A.M. Best does not anticipate any rating changes for Bermuda's domestic insurers as a result of Hurricane Gonzalo, which made landfall on the island on Oct. 17, 2014, with wind gusts that topped 130 mph. The eye of the storm passed directly over Bermuda, likely softening the blow of the storm and sparing the island more damaging winds.
AIR Worldwide placed loss estimates for Gonzalo at $200-$400 million, while domestic insurers are estimating that combined insurable losses from Hurricane Gonzalo and Tropical Storm Fay will be $50-$150 million.
An A.M. Best press release dated Oct. 17, 2014, noted that Bermuda's primary insurers are likely to absorb only a small portion of the losses. 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.
Building codes on the island are very strict allowing for safer structures that can withstand sustained winds of over 100 mph. The superior construction requirements set by Bermuda's building authority were proved effective by the lower than expected damage left behind by Hurricane Gonzalo.
A.M. Best will continue to analyze the impact of Hurricane Gonzalo on a company-by-company basis.
The methodology used in determining ratings is Best's Credit Rating Methodology, which provides a comprehensive explanation of A.M. Best's rating process and contains the different rating criteria employed in the rating process. Best's Credit Rating Methodology can be found at www.ambest.com/ratings/methodology.
A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.