AXIS faces $130m cat loss plus tax charge in Q4
Bermuda-based specialty re/insurer AXIS Capital Holdings estimated the net financial impact from fourth quarter 2017 catastrophe and weather-related losses at $130 million.
The figure is net of tax and estimated recoveries from reinsurance and retrocessional covers, and includes the impact of estimated reinstatement premiums.
The estimate includes higher expected losses from the October 2017 Northern California wildfires of $54 million. The company had previously expected it in a range of $35 million to $45 million.
The total losses also include a preliminary estimate of $38 million related to the more recent wildfires in Southern California as well as $38 million related to other events. Other event losses are primarily attributable to an aggregate excess of loss reinsurance cover which was impacted by various 2017 catastrophe and weather-related events.
Furthermore, as a result of the reduction in the US corporate income tax rate from 35 percent to 21 percent enacted as part of the US tax reform, AXIS Capital expects to recognize a tax charge in the fourth quarter of 2017 related to the revaluation of its net deferred tax asset (DTA). This charge is estimated to be approximately $42 million and will not affect the company’s non-GAAP operating net income. Based on its preliminary assessment, AXIS does not currently expect the tax reform to have a material impact going forward on its net income.
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