Swiss Re estimates it will pay claims of approximately $1.0 billion for natural catastrophes booked in the fourth quarter of 2018, with the largest generated from California wildfires and Hurricane Michael.
These natural disaster claims will mainly affect its Reinsurance Business Unit and are net of retrocessional coverage and before tax.
Swiss Re estimated a combined claims burden from natural catastrophes and large man-made disasters of US$2.9 billion for the full year 2018. (For the whole industry in 2018, Swiss Re’s sigma research unit estimates global insured losses from catastrophes of US$81 billion, which are the fourth highest on sigma records.)
Breaking down the events, Swiss Re anticipates claims from Camp and Woolsey fires, which broke out on Nov. 8 in California, to be US$375 million. (Swiss Re expects an overall industry loss for both fires of US$16 billion.)
Swiss Re’s estimated claims from Hurricane Michael, which made landfall just northwest of Mexico Beach, Fla. on Oct. 10, 2018, are expected to reach $150 million. (Swiss Re expects an overall industry loss for Hurricane Michael of $8.5 billion.)
Japan’s 3rd Quarter Typhoons
Swiss Re said its estimated claims from Typhoons Jebi and Trami, which hit Japan in September (in the third quarter), have seen adverse loss development, increasing by $320 million in Q4 2018. This has led 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 last year’s Japan events of $12 billion.)
The reinsurer said the total number of claims for Q4 natural catastrophes also includes smaller events, such as the Sydney hailstorm Dec. 20, 2018.
The last quarter of 2018 was also affected by several large man-made disasters, which Swiss Re estimated will generate approximately $300 million in claims. These disasters include a major satellite loss, a large industrial fire in Germany and a further increase in the estimated claims of the Ituango dam flooding in Colombia. This claims burden is expected to be roughly equally distributed between Swiss Re Corporate Solutions and the company’s Reinsurance Business Units.
“The last quarter of 2018 was severely impacted by natural catastrophes. 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”, says Edouard Schmid, Swiss Re’s group chief underwriting officer.
“We are working closely with our clients to ensure affected people and communities are supported and able to get back on their feet as soon as possible.”
Swiss Re said the foregoing estimates are subject to a higher than usual degree of uncertainty and may need to be subsequently adjusted as the claims process continues.
Source: Swiss Re
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