Reinsurance News

XL Group reveals $245mn preliminary loss estimate for 2016 fourth quarter

10th January 2017 - Author: Staff Writer

Insurance and reinsurance firm XL Group reported a preliminary $245 million of natural catastrophes loss estimate for 2016’s fourth quarter.

These estimated losses are split at about $125 million in insurance and $120 million in reinsurance.

The XL Group said the biggest losses came from Hurricane Matthew – with $130 million split about even between its insurance & reinsurance businesses.

The recent earthquake in New Zealand dealt XL Group another major loss; the company reported $75 million in losses, about 75% of which hit its reinsurance segment.

Other catastrophe losses from the fourth quarter came from a series of smaller events from both the final and previous quarters of 2016 – these impacted the insurance businesses.

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XL Group said actual losses may differ materially from the estimate; “there is considerable uncertainty associated with the loss estimates of these events and such estimates are accordingly subject to revision as additional information becomes available.”

This preliminary estimate is pretax and net of reinsurance and reinstatement premiums.

Equity Analysts Keefe, Bruyette & Woods said that while XL Group’s  losses were far above their estimation of $200 million, the Reinsurer maintains its 2017E/2018E EPS of $4.00/$4.30 and Outperform rating.

But XL’s shares are expected to trade down today on account of the higher-than-expected catastrophe losses, according to Keefe, Bruyette & Woods report.

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