Reinsurance News

Everest Re’s Q1 cat losses reveal rising California wildfire costs

12th April 2018 - Author: Matt Sheehan

Everest Re Group has reported that it expects to incur $100 million of estimated catastrophe losses in the first quarter of 2018, largely due to rising industry loss estimates from the California wildfires, which are now projected at over $13 billion.

Everest Re logoLoss estimates have risen dramatically since the fourth quarter of 2017 when the wildfires struck, as Everest Re’s initial estimates placed predicted losses between $8 billion and $10 billion, based on the best available information at the time.

The Bermudian reinsurer stated that the $100 million Q1 losses were net of reinsurance recoverables and reinstatement premiums, and attributed losses to wildfires and ‘related events’, which may refer to the mudslides that hit California’s Montecito in January 2018.

Everest Re noted that the heightened industry loss estimate was consistent with revised reports of escalated claims costs from many of its clients, prompting the company to adjust its quarterly loss estimate.

A series of wildfires struck areas in both Northern and Southern California in October and December of 2017, causing widespread damage to homes and businesses.

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From the first quarter of 2018, Everest Re will also be adjusting the way it reports operating income to exclude foreign exchange gains and losses, which it believes are not indicative of the performance for underlying business in a given period.

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