Insurance losses will be less than Hurricane Fabian, the last significant storm to affect Bermuda, according to Fitch Ratings, reported in a Fitch Wire article on Monday.

Fitch expects limited industry insured losses from Hurricane Gonzalo as well as Hurricane Ana, a Pacific storm which simultaneously was threatening to produce extensive damage to Hawaii.

Hurricane Fabian passed about 14 miles west of the island as a category three hurricane in September 2003 and caused about $300 million (in 2003 dollars) of insured losses. Hurricane Gonzalo, which made landfall in Bermuda as a strong category two hurricane, had a very large and calm hurricane eye which passed directly over the island, reducing the overall wind impact and mitigating the damage.

Fitch Wire stated: “Bermuda’s extensive hurricane preparedness and strict enforcement of its building codes, which are designed to withstand sustained wind speeds up to 110mph and gusts up to 150mph, favourably helps the island to limit both its economic losses and loss of life compared with other hurricane-prone nations that are less developed. In addition, Bermuda-based (re) insurers generally have contingency plans in place to shift operations to other jurisdictions, where they often also have a considerable presence, so as to minimise overall disruptions.

“While these events will add to insured losses for the year, overall industry catastrophe losses remain below average thus far in 2014. As such, Fitch expects soft market pricing conditions in property catastrophe reinsurance to continue at the January 2015 renewals and beyond.”

Fitch Wire stated that the absence of large losses since 2012, abundant capacity levels and sluggish demand from reinsurance buyers have resulted in a softening market for reinsurers, characterised by falling prices and, less visibly, weakening terms and conditions. This deteriorating reinsurance market environment led Fitch to assign a negative fundamental sector outlook to global reinsurance in January 2014. Fitch estimates that it would likely take a major industry loss event nearing $100 billion to potentially result in a broad hardening of property and property catastrophe market prices.

Separately, Fitch Wire reported that Hurricane Ana intensified to become a category one hurricane on Friday, October 17, before passing well southwest of the Hawaiian Islands over the weekend. The storm brought considerable rainfall to the island chain; however, material insured losses are not expected to result from the storm given its moderate intensity and final track away from the islands. The last hurricane event to significantly affect Hawaii came in September 1992, when Hurricane Iniki made landfall as a category four storm.

Useful website: www.fitchratings.com