Arch Capital estimates up to $560m of Q3 cat losses
Arch Capital Group Ltd has estimated pretax net catastrophe losses of $530 million to $560 million across the property casualty insurance and reinsurance segments in the 2022 third quarter.
The Bermudian-based re/insurer said its quarterly results will be negatively impacted by the effects of Hurricane Ian, which made landfall on the west coast of Florida on September 28, as well as from a series of other global events that occurred this year, including US convective storms, Typhoon Nanmadol and the June French hailstorms.
The estimates are net of reinsurance recoveries and reinstatement premiums.
The company said its estimate for Hurricane Ian is commensurate with a range of estimated insured losses across the global property/casualty insurance industry of $50 billion to $60 billion for this event, resulting in an approximate market share of industry losses for the company that is comparable to prior natural events of a large magnitude.
The losses are currently expected to be split approximately 70/30 per cent between the company’s reinsurance and insurance businesses, respectively.
At this time, Arch said, there are significant uncertainties surrounding the ultimate number of claims and scope of damage resulting from these events.
The company’s estimates across its insurance and reinsurance segments are based on currently available information derived from modelling techniques, including preliminary claims information obtained from the company’s clients and brokers, a review of relevant in-force contracts and estimates of reinsurance recoverables.
These estimates include losses only related to claims incurred as of September 30. Actual losses from these events may vary materially from the estimates owing to several factors, including the inherent uncertainties in making such determinations, the company said.
For Hurricane Ian in particular, Arch said, the timing of the event late in the third quarter increases the uncertainty in the company’s estimates, as it is relying on a preliminary view of the claims that may be reported, with limited knowledge of the actual insured damage that may have been sustained during the event.