Farmers Insurance has announced that it’s received more than 4,000 claims from the Northern California wildfires, with an estimated total cost of $1.2 billion, the majority of which will be passed onto its reinsurers.
The California Department of Insurance announced recently that insurance claims filed in relation to the October wildfires had exceeded $9.4 billion, while catastrophe risk modeller AIR Worldwide has produced an initial industry loss of up to $10.5 billion.
Farmers states that with reinsurance its estimated incurred loss will be $140 million, which, declines to $90 million after both reinsurance and taxes. This means that of the firm’s total expected $1.2 billion hit from the Northern California wildfires, it will retain just 7.5% of the overall loss. With its panel of reinsurers assuming 92.5%, or $1.110 billion of the loss.
Farmers notes that following the extensive damage caused by the wildfires, it deployed Catastrophe Response Claims Team members and also Mobile Claims Center buses in order to help expedite claims processing and assist with the ongoing recovery efforts.
A number of insurers and reinsurers have reported estimated losses from the October California wildfires, but Farmers is the first to exceed $1 billion.
Re/insurers 2017 earnings were already under significant pressure from the soft market environment and the active catastrophe experience of the third-quarter, and the Northern California wildfires combined with the more recent Southern California wildfires will only add to the bill and intensify pressure.