Arch expects up to $130m in disaster losses
Arch Capital has estimated catastrophe losses of between $110 million and $130 million for the fourth quarter of last year.
The Bermudian insurer and reinsurer said the losses related primarily to Hurricane Michael and wildfires in California.
The estimate is net of reinsurance recoveries and reinstatement premiums.
Arch said the estimated range incorporates and updates the $40 million to $60 million range previously disclosed by the company, which included only Hurricane Michael.
Additionally, Arch estimates an effective tax rate on pre-tax operating income for the fourth quarter of 2018 in a range of 12 to 15 per cent.
This estimate is based on both statutory income tax rates applied to underwriting income, expenses and investment returns by jurisdiction, as well as an amalgam of discrete items.
The effective tax rate for the 2018 fourth quarter reflects a higher proportion of US-based operating income.
“The losses related to the 2018 fourth-quarter catastrophic occurrences emanated mostly from our non-US underwriting operations,” Arch added.
“This tax rate range is subject to change as analyses of group-wide loss reserves and investment returns, among other areas, are finalised.”