“Due to the Maui, Hawaii wildfires on August 9, we preliminarily estimate our net loss exposure to be $7.5 million plus additional cost in the form of reinstatement premiums to restore any necessary reinsurance layers,” Hallmark Financial has said amid its Q2 results.
The wildfire outbreaks in Hawaii have caused mass devastation, with the greatest concentration of damage being in Lahaina, a town on the island of Maui’s western coast. A Maui County update recently revealed that 2,207 structures have been damaged or destroyed by the fires, with an estimated reconstruction cost of $5.52 billion.
Though still too early to give an exact estimate, catastrophe risk modeller Karen Clark & Company has said that the total insured loss will be “second only to Hurricane Iniki based on today’s property value.”
Hallmark has thus noted that the net loss, and any additional cost incurred, will be recognised in its third quarter 2023 financial statements.
Turning to the firm’s wider results, Hallmark reported a net loss of $11.9 million in Q2 of 2023, which includes $3.1 million related to the DARAG(a) write-off to bad debt expense based on the final definitive award declared on June 2, 2023, compared to a net loss of $69.4 million for the comparable period in 2022.
Hallmark’s Q2 net combined ratio was 157.3%, compared to 240.9% for the same periods the prior year. The year-to-date net combined ratio for 2023 is 185.9%, compared to 187.3% for the comparable period in 2022.
Meanwhile, Hallmark’s net investment income in Q2 stood at $4 million as compared to $3.1 million during the same period in 2022. Year-to-date net investment income for 2023 is $8.4 million as compared to $5.0 million for the comparable period in 2022.
