Global Q1 insured cat losses below average

Global insured catastrophe losses are estimated at between $5 billion and $10 billion, well below the historical average of $14 billion, according to Morgan Stanley analysts.

Notable events include a bomb cyclone in the US, winter storms Eleanor, Carmen, and Friederike in Europe, and four consecutive nor'easters in March. As a result of the reduced first quarter catastrophe estimates Morgan Stanley analysts have raised the earnings per share (EPS) estimates for a group of covered insurers by around 5 percent on average, seeing the most upside for reinsurers.

The analysts reduced the estimate for the first quarter catastrophe losses for Allstate to $375 million from $467 million. For AIG the estimates dropped to $225 million from $288 million.

Benign losses should lead to high-single- / low-double-digit return on equity (ROE) for the most of the group, around 210 basis points (bps) above from year-ago levels. The analysts expect 10 of 15 P&C carriers to produce double-digit returns.

On top of the earnings list is Everest Re with estimated earnings per share of $7.99, up from $5.64. It is followed by Travelers with $2.82 after an earlier estimate of $2.78, and Renaissance Re with $2.78, an increase from $2.61.

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