Aon estimates nor'easter losses in hundreds of millions; AM Best puts Polo in same band

Aon estimates that the nor'easter that crossed the Mid-Atlantic and Northeast in late September left insurers with hundreds of millions of dollars in losses, and AM Best News, reporting the estimate, puts Hurricane Polo in the same band. The nor'easter carries the fuller description: rare, early for the season, and concentrated in the Mid-Atlantic and Northeast, with the timing given as late September. Polo appears beside it with a comparable order of magnitude and little else attached.

Nothing in the account puts a margin around Aon's number, sets an industry loss figure beside it, or gives an insurer's own tabulation for either event, and no program, reinsurer or transaction is named. Both storms appear under wording that treats them as possibilities rather than results, which is the grammar of an opening estimate and a reason to read the figure as a direction rather than a settled cost.

Two events in one season raise a question a single estimate cannot answer: whether any one program absorbed both, and what the second cost if the first had already eaten into an aggregate. An insurer carrying both would see the pair differently from one carrying only the hurricane, and the account does not distinguish between them or identify an aggregate program.

A first estimate is also the one most likely to move. The numbers insurers eventually book, and the point at which their own tabulations appear, will be what any comparison rests on, and they sit some distance from a broker's opening range.

For a wealth practice the chain from a storm to a client statement is long and runs through holdings some clients do have: insurance-linked funds, catastrophe bonds, insurer equity. Hundreds of millions is enough to register as a loss; whether it is enough to reach an attachment point depends entirely on the terms of a transaction, and the account names none. The effect on any specific holding is, on this evidence, unconfirmed.

The next hard number will come from an insurer's own tabulation or from a transaction reporting a loss against its terms. Until one of those appears, the more documented half of the pair remains the nor'easter: early for the season, rare in its timing, and estimated in the hundreds of millions.