Bermuda-headquartered reinsurer Everest Re has announced that it expects to report a charge for net reserve adjustments of approximately $250 million for Q2 2018, in relation to prior year catastrophe events.
The increase in estimates was mostly driven by reopened claims reported in the second quarter and loss inflation from higher than expected loss adjustment expenses and, in particular, their impact on aggregate covers.
At the same time, current year weather related events are expected to result in a second quarter charge of approximately $25 million, after tax, explained the reinsurer.
Despite this, Everest Re says it expects to report net income for the second quarter of 2018.
“Losses from events like the industry experienced in 2017 are difficult to estimate. The number of reopened claims and the extraordinary surge in LAE were well above the market expectation,” Said Dom Addesso, President and Chief Executive Officer of Everest Re.
“Nevertheless, it is helpful to keep this loss development in context. We are in the business of absorbing volatility and over the last five years we have generated over $3.5 billion in profits from our property catastrophe portfolio.”
“Our portfolio in 2018 is positioned to deliver even better margins. Additionally, the non-cat reinsurance portfolio and the insurance book continue their favorable trends and should produce an excellent result in the second half of the year.”
