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AXIS Capital pegs Q3 cat losses at up to $175mn, exceeding forecasts

11th October 2019 - Author: Matt Sheehan

Bermudian insurance and reinsurance firm AXIS Capital Holdings Limited has estimated that it will incur between $150 million and $175 million of catastrophe losses in the third quarter of 2019.

axis-capital-logoThe preliminary pre-tax estimates relate to losses stemming from Hurricane Dorian, Japanese typhoons, and other weather related events.

Notably, this loss range is well above the level analysts had expected to see, with KBW previously forecasting AXIS’ Q3 cat losses at around $73.5 million.

AXIS maintained that the estimate was consistent with industry insured losses of approximately $6 billion for Hurricane Dorian and $8 billion for the Japanese typhoons.

KBW believes that these industry numbers are on the conservative side, but noted that most exposed re/insurers are likely to incorporate extra conservatism into their Q3 loss estimates following the unprecedented loss creep associated with some recent events, particularly Typhoon Jebi in 2018.

AXIS explained that its loss figures are net of estimated recoveries from reinsurance and retrocessional covers, and include the impact of estimated reinstatement premiums.

The estimate also includes full limit losses from aggregate excess of loss reinsurance treaties that were also impacted by other 2019 catastrophe and weather-related events.

The company said it based its estimates on a ground-up assessment of losses from individual contracts and treaties exposed to the affected regions, including preliminary information from clients, brokers and loss adjusters.

Industry insured loss estimates, market share analyses and catastrophe modeling analyses were also taken into account where appropriate.

Due to the nature of these events, including the complexity of loss assessment, factors contributing to the losses and the preliminary nature of the information available to prepare this estimate, AXAIS warned its ultimate losses for these events may differ materially from this current estimate.

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