XL Group has released preliminary loss estimates for the Southern California Wildfires of $45 million and $20 million for other severe weather events, with losses split at about even between the firm’s insurance and reinsurance segments.
XL also announced an expected one-time tax charge of about $98 million to impact 2017 Q4 results, based on the firm’s net U.S. deferred tax assets as of September 30, 2017 as a result of the reduced U.S. corporate income tax rate.
The group’s total aggregate net loss estimates for Q4 2017 catastrophes is at $315 million, including the previously announced $250 million related to the October 2017 Northern California wildfires and other events.
The total aggregate loss estimates are pre-tax and net of reinsurance, reinstatement and adjustment premiums and redeemable non-controlling interest.
The Company also reaffirmed its previously disclosed aggregate net losses related to the third quarter 2017 catastrophes.
As XL continues to pay claims and receive reported loss information since the Q4 weather events, ongoing assessment has resulted in approximately 6% of Q3 2017 aggregate net losses being reallocated from the Reinsurance Segment to the Insurance Segment.
According to preliminary assessments, XL said it doesn’t expect U.S. Tax Reform to have a material impact going forward on its average global effective tax rate.
The Company’s preliminary loss estimates are based on its review of individual treaties and policies expected to be impacted, along with available client and industry data, however, actual losses may differ materially from these preliminary estimates as assessment for Q4 losses is still ongoing.