The lion’s share of the insurance claims made in Bermuda in relation to Hurricane Gonzalo will not be shouldered by local insurers — but instead by the companies that reinsure them.

That is the view of rating agency AM Best, which said today it “does not anticipate any rating changes for Bermuda’s domestic insurers” as a result of the category three storm, which battered the Island on October 17.

Best noted that catastrophe modelling firm AIR Worldwide placed loss estimates for Gonzalo at $200 million-$400 million, while domestic insurers are estimating that combined insurable losses from Hurricane Gonzalo and Tropical Storm Fay, which hit Bermuda less than a week earlier, will be $50-$150 million.

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”.

The New Jersey-based rating agency added: “Building codes on the Island are very strict allowing for safer structures that can withstand sustained winds of over 100mph. The superior construction requirements set by Bermuda’s building authority were proved effective by the lower than expected damage left behind by Hurricane Gonzalo.”