Travelers expects up to $675m Q4 pre-tax loss from California wildfires
The Travelers Companies estimated fourth-quarter catastrophe losses related to the California wildfires, including estimated recoveries from reinsurance, to be in the range of $525 million to $675 million pre-tax.
After tax, the incurred losses will reach between $340 million and $440 million, according to the company.
The estimates reflect, among other factors, the high average replacement value of homes in the affected areas and a high incidence of total losses, which also include contents, other structures and additional living expenses. The company’s estimates also reflect losses from its commercial businesses, including its agribusiness unit.
Multiple wildfires exacerbated by hot, dry, and windy conditions spread across eight counties of California starting in early October. Twenty-two active wildfires were reported by CAL FIRE on October 12, consuming more than 170,000 acres and destroying more than 3,500 structures.
Insured losses from the Tubbs, Pocket, Nuns, Atlas, Redwood, and Sulphur fires in California will be between $2 billion and $3 billion, according to estimates by catastrophe modelling firm AIR Worldwide.
“The toll from one of the worst wildfire events in US history is devastating,” said Travelers CEO Alan Schnitzer. “Lives were tragically lost, property and personal possessions were destroyed and entire communities are now forced to start over. Our claim professionals are on the ground, and we’ll work tirelessly with our customers to help them and their communities recover as quickly as possible,” Schnitzer added.
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