Swiss Re hit by $1bn cat losses in Q4
Swiss Re has estimated its preliminary combined claims burden from recent natural catastrophes booked in the fourth quarter of 2018 at approximately $1.0 billion, net of retrocession and before tax, mainly affecting the reinsurance operations.
"The last quarter of 2018 was severely impacted by natural catastrophes,” said Edouard Schmid, Swiss Re's group chief underwriting officer. “In the US, hurricane Michael was the strongest storm to hit Florida since hurricane Andrew in 1992 and in California, wildfires caused great damage as they also spread to urban areas", Schmid added.
Swiss Re anticipates claims from the Camp and Woolsey fires in California to be $375 million. Both Californian fires broke out on Nov. 8, 2018. Due to very dry weather conditions, the fires spread quickly. The Camp fire destroyed the town of Paradise, being one of the deadliest and most destructive fires on record in the US. Over 52,000 people were evacuated from the Camp fire. The Woolsey fire in Los Angeles and Ventura Counties was also very destructive, prompting the evacuation of more than 295,000 people. Both fires raged over a week, claimed over 85 lives and destroyed thousands of acres and over 20,000 buildings. Swiss Re expects an overall industry loss for both fires of $16 billion.
The claims burden for Swiss Re from hurricane Michael is expected to be $150 million. Hurricane Michael made landfall just northwest of Mexico Beach, Florida, in the afternoon on Oct. 10, 2018 as a strong category 4 hurricane with maximum sustained winds near 155 mph and even higher gusts, according to the reinsurer. Swiss Re expects an overall industry loss for hurricane Michael of $8.5 billion.
Swiss Re's estimate for Typhoons Jebi and Trami increased by $320 million in the fourth quarter of 2018, net of retrocession and before tax, leading to a total loss burden from major Japan events in 2018 of $1.2 billion, net of retrocession and before tax. Swiss Re expects an overall industry loss for the Japan events of $12 billion.
In addition, large man-made events are expected to cause Swiss Re a pre-tax claims burden of approximately $0.3 billion in the fourth quarter of 2018, including, among others, a major satellite loss, a large industrial fire in Germany and a further increase in the estimated claims of the Ituango dam flooding. This claims burden is expected to be roughly equally distributed between the corporate solutions and reinsurance business units.
Overall, Swiss Re expects a pre-tax combined claims burden from natural catastrophes and large man-made disasters of $2.9 billion for the full year 2018. For the whole industry in 2018, Swiss Re estimates global insured losses of $81 billion.
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