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Subject:  Re: $60.4 Billion for Hurricane Sandy Date:  1/2/2013  9:25 AM
Author:  DrBob2 Number:  40105 of 91583

Willis Re, a reinsurance company, has released an end of the year report.

There are a couple of interesting quotes from the introduction:

Lastly, Superstorm Sandy has yet again demonstrated the danger of overreliance on catastrophe models, due to the complexity of the original loss as well as the emergence of a new and as yet unmodeled uncertainty: the politicization of policy form interpretation.

The politicization comment is in reference to the hurricane deductible. Since Sandy was not classified as a hurricane when it landed the insurance deductibles are much higher than if it had been even a Cat 1.

"...most reinsurers are still within their annual catastrophe budgets for 2012 and not facing any capital impact....In the absence of Superstorm Sandy, reinsurers would have found it difficult to resist buyer pressure for further concessions. As such, Sandy’s impact has helped to stabilize market pricing on an overall basis and reinsurers have largely delivered to their clients in terms of capacity and continuity.

Translation: Thank heavens for Sandy.

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