Global reinsurance giant Swiss Re said this morning that it is expected to take $1.4 billion of losses from natural catastrophes and man-made disasters that occurred during the third-quarter of 2018.
Given Swiss Re’s global operations in reinsurance and commercial insurance, the firm was always going to experience a significant hit from loss events that occurred around the world during the period and the losses revealed reflect that broad exposure.
Swiss Re said that it expects $1.1 billion of natural catastrophe losses, net of retrocession and before tax, with weather losses in Japan the major driver of these.
On top of this, another $300 million of man-made disaster losses was revealed, almost equally split between Swiss Re’s reinsurance and Corporate Solutions operations.
On the natural catastrophe side, Swiss Re said that $500 million of the quarters losses would come from typhoon Jebi’s impacts in Japan. Another $120 million are due to hurricane Florence’s impacts in the United States. While the remaining losses are due to further severe weather in Japan, including typhoon Trami’s winds and floods, as well as U.S. losses including the Carr Wildfire in California and a windstorm in Ontario, all aggregate to another $500 million of large natural catastrophe losses for the firm during the quarter.
Swiss Re pegs typhoon Jebi industry losses at roughly $6 billion and expects its losses from that event to be largely on the reinsurance side of the business, while hurricane Florence is pegged at around $4 billion and will impact both the reinsurance and Corporate Solutions sides of Swiss Re.
Swiss Re’s Group Chief Underwriting Officer, Edouard Schmid, commented on the nat cat losses, “We extend our deepest sympathies to those who have been affected by these catastrophes. We are working very closely with our clients and partners to help rebuild as quickly as possible. With our strong capital position and high financial flexibility, we are able to react fast when our clients need us most. We also want to stress our continued commitment to providing capacity in Japan, where we demonstrated our steadfast support following the earthquake off the coast of Honshu in 2011.”
On the man-made losses, Swiss Re said that the $300 million of third-quarter impact is largely from the collapse of the Genoa motorway bridge in Italy, the Lürssen luxury yacht manufacturer shipyard fire in Germany and the Ituango dam loss event in Colombia, with the impacts split across reinsurance and Corporate Solutions.
The company said that while the losses are large for a single quarter, for 2018 to-date the firm sees its cumulative nine-month losses as “broadly in line with year-to- date expectations.”
The firm also noted that these loss figures remain uncertain and further development is possible.