Analysts at KBW have estimated that global catastrophe losses in the fourth quarter of 2019 amounted to $19.2 billion.
Losses stemmed mostly from Typhoon Hagibis, US storms, Chilean and Hong Kong riots, and Australian wildfires.
KBW is anticipating rising insured loss estimates for the Australian wildfires in particular, as claimants increasingly begin to return to their homes.
Of these Q4 events, Typhoon Hagibis is considered to be the worst catastrophe loss by some way, although the Chilean protect and Australian fires are also likely to have a significant impact on international re/insurers, including many Lloyd’s syndicates.
KBW expects aggregate reinsurance coverage to absorb a large proportion of catastrophe losses for some companies, particularly for AIG and Travelers, amongst others.
These insurers should report lower Q4 catastrophe and non-catastrophe weather losses than run-rates would imply, although analysts expect the cost of these contracts to rise for 2020.
The National Oceanic and Atmospheric Administration reported that the total number of Q4 US storms rose 21.6% last year, increases of 18.3% for hailstorms and 47.8% for windstorms modestly offset by a 40.3% decline for tornadoes.
KBW is forecasting accident-year margin pressure in personal lines and workers compensation, and said that core commercial underwriting margin progress will depend on both earned rate increases and individual company loss picks.
It also anticipates fading net reserve releases overall, reflecting worsening loss trends and most recent accident years’ more aggressive loss picks.
Reinsurers Munich Re and Swiss Re previously released catastrophe loss estimates for the whole of 2019, placing total economic losses at $150 billion and $140 billion, respectively.
Munich Re believes $52 billion of these were covered by re/insurance, while Swiss Re said $56 billion. Both estimates were significantly down on figures for the previous year.
