Bermuda-based reinsurer RenaissanceRe (RenRe) has revealed that it expects Typhoon Hagibis to have a net negative impact on its net income of approximately $175 million on its fourth-quarter 2019 results.
Aftermath of Typhoon Hagibis in Nagano, Japan on October 15th. Source: AP Photo/Jae C. Hong
RenRe today announced its financial results for the third-quarter of 2019, announcing a decline in operating income, year-on-year, primarily as a result of catastrophe events in the period.
Most notably, RenRe’s third-quarter profit was hit by the impacts of Hurricane Dorian and Typhoon Faxai, which, combined resulted in a net negative impact on net income available to RenRe common shareholders of just under $155 million.
This is comprised of approximately $52.3 million of losses from Dorian and approximately $103 million of losses from Faxai.
At a combined $155 million, the negative impacts of Dorian and Faxai on the firm’s income is lower than what it expects to experience in the final quarter of the year as a result of Hagibis.
Currently, and based on catastrophe risk models, re/insurers can expected an industry loss of between $5 billion and $9 billion from Typhoon Faxai. For Typhoon Hagibis, the current insured industry loss range is much wider, ranging from $6 billion to as much as $16 billion, according to AIR Worldwide.
With insurers and reinsurers now reporting third-quarter results, it’s becoming clear that while catastrophe losses this year appear to be lower than that experienced last year, so far, by no means has it been benign.
A number of firms have announced lower profits as a result of the impacts of Dorian and Faxai, so with Hagibis expected to be an even more expensive event for the industry, Q4 and subsequently full-year 2019 results might not be what some had hoped for in what’s still a very challenging, and very competitive marketplace.
