Reinsurance News

RenRe warns of operating loss as cats drive $325mn negative impact in Q3

14th October 2020 - Author: Luke Gallin

Bermuda-based reinsurer, RenaissanceRe Holdings Ltd. (RenRe), expects to report an operating loss for the third-quarter of 2020 as estimated losses from catastrophe events in the period are projected to drive a net negative impact of roughly $325 million.

RenaissanceRe buildingThe estimated net negative impact on its operations in Q3 is primarily driven by losses from Hurricanes Laura and Sally, alongside wildfires in California, Oregon, and Washington.

Additionally, losses from the August 2020 derecho which hit the U.S. Midwest, Hurricanes Isaias, Typhoon Maysak, and also aggregate losses associated with these and other events, contributed to the overall estimated negative impact in the period.

As a result of the $325 million hit, RenRe says that it expects to report modest net income for the third-quarter of the year. However, the net negative impact is expected to push the firm to an operating loss in the period.

“We extend our sympathies to all those affected by the quarter’s catastrophic events. This elevated wind and wildfire season reinforces the value of reinsurance in ameliorating the growing impact of climate change. Protecting communities from climate-related disaster is an important part of our purpose, which we fulfil through the rapid payment of claims to our customers,” said Kevin O’Donnell, Chief Executive Officer (CEO) of RenRe.

Of course, wildfire and storm activity has persisted into the final quarter of the year. RenRe notes the impacts of Hurricane Delta in both Mexico and the U.S., as well as the ongoing wildfires in California, and says that the estimated losses from these events will be included in its fourth-quarter 2020 results.

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