Zurich sees max $20m H2 hit to Farmers Re from catastrophes
Zurich Insurance Group said that Farmers Re faced a hit of no more than $20 million in the second half from catastrophes such as Hurricanes Irma and Harvey.
Farmers Insurance Group estimated overall gross losses from Hurricane Irma at $140 million which is expected to be fully recovered under the Exchanges reinsurance programs with no net impact to the Farmers exchanges. In addition, Farmers estimated gross losses from Hurricane Harvey in Texas at $500 million and losses net of reinsurance and tax of $140 million.
“Zurich is only indirectly exposed to Farmers’ underwriting results through the quota share treaty with Farmers Re,” the company said in an emailed statement.
“The eight percent quota share to Farmers Re includes a cap on overall losses from catastrophes of around $100 million on a 12-month basis. As a result of the losses incurred over the first half of the year the maximum potential loss to Farmers Re from catastrophes over the second half of the year is in the $10-20 million range.”
Zurich noted that it has no ownership interest in the Farmers Exchanges. Farmers Group provides certain non-claims administrative and management services to the Farmers Exchanges as its attorney-in-fact and receives fees for its services.
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