Bermuda's Everest Re expects to incur $100m of estimated catastrophe losses, net of reinsurance recoverables and reinstatement premium, in the first quarter of 2018 largely due to the 2017 Californian wildfires.
The re/insurer said it based its initial estimate, part of overall cat losses of $161.5m recorded for Q3 2017, on the latest modelled data and loss estimates available at the time of the fires.
At the time of the fires at the end of 2017 projected industry-wide loss estimates stood at between $8bn and $10bn. However, it noted losses from the fires had "risen dramatically" since the end of 2017 and are now projected at over $13bn for the industry as a whole.
Everest Re added the latest estimate is "consistent" with revised reports of escalated claims costs noted by its clients.
Fires blazed through large parts of Northern and Southern California in October and December 2017 burning more than 1.3bn acres, killing at least 43 people and injuring 185 others.
In addition to the estimate, Everest Re also revealed a change in its reporting of operating income. Starting in Q1 2018, the re/insurer will adjust operating income to exclude foreign exchange gains and losses. Historically, operating income was treated as net income and excluded realised capital gains, losses and tax impact related to the Tax Cuts and Jobs Act 2017.
According to Everest Re, the change is due to "the impact of foreign currency movements on income [and] is not indicative of the performance of the underlying business in a particular period."
Companies:Everest Re
