Lancashire anticipates large Q3 storm exposure
Bermuda-headquartered Lancashire Holdings Limited’s third-quarter earnings release in early November will include losses for exposures to recent natural catastrophe events, including Hurricane Ida and the European storms Bernd, Volker and Xero.
Lancashire said that it estimates net ultimate losses in a range of $165 million to $185 million.
But Lancashire has also served notice of exposure to large-loss events within its political violence portfolio related to the unrest in South Africa during July.
The estimated aggregate of ultimate net loss for these events could be $40 million.
The estimated losses are after anticipated recoveries from Lancashire’s outwards reinsurance programme and the impact of outwards and inward reinstatement premiums.
Alex Maloney, group chief executive officer, said: “Our thoughts are with those who have suffered as a result of the recent catastrophe and political violence events.
“For Lancashire, these loss estimates are within our expectations for these types of events and demonstrate the value of our products to our (re)insureds and other stakeholders.
“Looking ahead, the company remains strongly capitalised to be able to take advantage of the improving market, both in the rest of this year and in order to achieve our ambitious underwriting plans for 2022.
“The rating environment continues to improve, premiums continue to grow and we are well positioned to achieve our strategic goals.”
Lancashire has estimated its exposure to wind storm and flood-related events in the following classes: property retrocession, property direct and facultative, property reinsurance, marine and energy.
Lancashire said that its preliminary estimates for the loss events have been derived from a combination of market data and assumptions, a limited amount of provisional loss advice, limited client loss data and modelled loss projections.
The actual ultimate loss may vary from the preliminary estimates announced as additional information emerges. The final settlement of all claims is likely to take place over a considerable period of time.
Lancashire is due to release the group’s financial statements for the third quarter on November 4.