US insurance companies have limited exposure to massive damage from earthquake in HaitiBy Ieva M. Augstums, AP
Wednesday, January 13, 2010
US insurers have limited exposure in Haiti
CHARLOTTE, N.C. — U.S. insurers may have very little exposure to the massive losses caused by the earthquake that struck Haiti.
Haiti is one of the smallest insurance markets in the Americas, with a total non-life insurance premium income of just under $20 million, “which reflect the country’s poverty,” according to a report Wednesday from Newark, Calif.-based Risk Management Solutions Inc. By comparison, the total net premiums for property and casualty coverage in the U.S. in 2008 totaled nearly $441 billion, the most recent figures available from the Insurance Information Institutes 2010 Fact Book.
If there is property and casualty insurance business in Haiti, it is “extremely low,” at around 0.3 percent of the country’s gross domestic product, said Jackie Barber, director of corporate marketing for RMS, which provides damage forecasts for insurance companies. In 2008, Haiti’s GDP was about $7 billion.
While insured loss estimates from Tuesday’s earthquake were not immediately available, Eqecat Inc. estimated damages at upward of hundreds of millions of dollars. Eqecat also provides damage forecasts for insurance companies.
Oakland, Calif.-based Eqecat said while it can be challenging to estimate exposure values in developing countries, the amount could have been higher had underwriters loosened their standards.
Chartis, American International Group Inc.’s spun-off property casualty and general insurance unit, and Travelers Cos., did not immediately detail the nature of their losses, or even if they had any.
A phone call to Chubb Corp. asking for their estimate of potential insured losses in Haiti, was not immediately returned.
Aon Benfield, a unit of insurance broker Aon Corp., said in a report Wednesday there was “not a clear indication as to how high (or low) insured losses may be.”
Insurance stocks were little moved by the news of the quake.
If there are claims to be paid by insurers, they are likely to be minimal, because insurance companies with business in developing countries is almost nonexistent, RMS’ Barber added.
Haiti will likely receive some help from its main catastrophe insurer, the Caribbean Catastrophe Risk Insurance Facility, a regional fund administered by participating governments.
Buildings destroyed or damaged by the quake include the presidential palace, the five-story United Nations headquarters, World Bank offices and hotels and hospitals in the capital Port-au-Prince, reinsurance broker Guy Carpenter & Co. said.
A Citigroup Inc. office building was also “seriously damaged,” company spokesman Jon Diat said.
“We are currently doing everything possible to account for all of our colleagues and ensure they are safe,” Diat said.
Tags: Caribbean, Charlotte, Haiti, Latin America And Caribbean, North America, North Carolina, Port-au-prince, United States