Mercury General Corporation, a Los Angeles-based multi-line insurer, has disclosed that it incurred $53 million ($52 million net of tax) of catastrophe losses in 2019.
More than two thirds of these losses were incurred in the fourth quarter of the year alone, and primarily resulted from the wildfires in California and other weather-related catastrophes.
During this period, Mercury General’s catastrophe losses reached $36 million (approximately $28 million net of tax).
There were no reinsurance benefits available under the company’s catastrophe reinsurance program for catastrophe losses in 2019, as none of the events exceeded the per-occurrence retention limit.
The retention limit under the reinsurance program was $10 million for the 12 months ending June 30, 2019 and $40 million for the period ending June 30, 2020.
Mercury General’s total pre-tax catastrophe losses included favourable development on prior year losses of approximately $1 million in Q4 and $4 million for the full year.
California was hit by a series of wildfires during the last quarter of 2019, the largest of which were the Saddleridge Fire in Southern California and the Kincade Fire in Northern California.
The scale of wildfire damage for a third consecutive year has prompted California to issue a mandatory one-year moratorium on insurance companies non-renewing policyholders, and to extend its non-renewal protections into new areas.