Winter storms prompt Q1 preannouncements
North American winter storms took their toll during the first quarter of 2018, leading several carriers to preannounce catastrophe losses ahead of their quarterly results.
Chubb estimated its total cat losses for Q1 at $380mn, with more than 50 percent of that attributable to two Northeast US winter storms in January and March. The firm estimated losses from the two storms at $115mn and $80mn, respectively.
January’s Californian mudslides, which were caused by heavy rainfall hitting areas which had previously succumbed to wildfires, contributed another $125mn to the Q1 catastrophe tally at Chubb.
The carrier’s mudslide losses may reflect its sizeable high-net-worth exposure in the area, which is home to movie stars, entertainers and media personalities.
Chubb’s $380mn Q1 2018 loss estimate is significantly higher than its prior-year figure of $206mn.
US personal lines carrier Allstate was also affected by storms in the first quarter, with one Mid-Atlantic and Northeast windstorm contributing more than 55 percent of its $222mn cat loss tally for March.
The March losses accounted for the majority of its Q1 cat loss total, which came in at $357mn before tax, plus unfavourable reserve re-estimates of prior reported cat losses. This is well under the firm’s Q1 2017 pre-tax cat losses, which totalled $805mn.
The Hanover was the third carrier in our coverage universe to report damage from winter storms, as events in the Midwest and Northeast US caused cat losses in the $66mn to $76mn range. Using the midpoint of $71mn, the estimate represents 5.5 percent of its earned premiums for the first quarter.
The carrier said the cat loss estimate included a $9.5mn benefit from favourable development on prior-year catastrophe losses, largely related to 2017 hurricanes and the California wildfires.
Elsewhere, Everest Re reported that it expected to book $100mn cat losses in Q1 2018, largely resulting from loss creep from the Q4 2017 Californian wildfires and related events.
The Bermudian explained that the losses reflected higher industry estimates for the wildfires in California. In its Q3 2017 results, it had estimated that losses from the wildfires would total $161.5mn.
Toronto-based Intact Financial Corporation, meanwhile, announced a C$130mn ($101.6mn) pre-tax loss from cat and non-cat weather-related events in the first quarter.
This represented an increase in weather-related losses of approximately C$40mn over the first quarter of 2017.
Just C$36mn of estimate was attributed to cat losses, compared with C$88mn in the prior-year period, which had experienced severe weather conditions.
Intact explained that in Q1 2018, it had endured a significant amount of non-cat weather-related losses due to severe winter conditions, which led to a higher frequency of auto collisions and water damage from frozen pipes.
Similarly, in Q1 2018 US carrier Selective Insurance Group experienced $28mn of non-cat property losses from winter weather – slightly exceeding its expected total of $26mn.
The losses stemmed mainly from a blizzard in January that hit the US Northeast and several nor’easters in March, the carrier said.