XL Group expects $1.48bn in nat cat losses
Bermuda-based XL Group said on Oct. 11 that it expects net losses of approximately $1.33 billion relating to Hurricanes Harvey, Irma and Maria, with total catastrophe losses including smaller loss events at approximately $1.48 billion in the third quarter.
These preliminary estimates are pre-tax and net of reinsurance, reinstatement and adjustment premiums and redeemable non-controlling interest. On an after-tax basis, the preliminary estimate of total catastrophe net losses for the quarter is approximately $1.35 billion.
Hurricanes Harvey, Irma and Maria each contributed approximately 25 percent, 40 percent and 25 percent, respectively, to the company loss estimates, with 10 percent related to all other events in the quarter, most notably the Mexican earthquakes and Typhoon Hato.
The estimated losses are approximately evenly split between XL Group’s insurance and reinsurance segments. The company noted that after the events it continues to have significant catastrophe reinsurance protections remaining for 2017 and 2018, including catastrophe bond protections, some of which extend through 2019.
XL’s CEO Mike McGavick said: “The problem of underinsurance is again laid bare, afflicting especially those already less well off. It is appalling, and all of us with expertise to offer must bend our minds to solving these systemic failures.
“As for market conditions, risk awareness has changed due to these events, and this in turn should cause the market to move towards more realistic and sustainable pricing for the risks undertaken."
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