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Tokio Marine's FICOH to hand Hawaii loss to reinsurers

hawaii august 2023 wildfire damage courtesy Hawai‘i DLNR.jpg
Photo: Hawai‘i DLNR

First Insurance Company of Hawaii (FICOH), a subsidiary of Tokio Marine, looks set to cede a significant loss to its reinsurers following last month’s Lahaina Fire, this publication has learned.

Sources said early indications suggest that FICOH would cede in the region of $400mn of losses to its panel of reinsurers.

It is understood that the estimate is based on early claims information and is likely subject to change as the loss develops.

Sources said Tokio Marine has also been in the market looking to buy a back-up cover.

Tokio Marine is perceived as a long-term buyer of reinsurance with a good track record around payback post-loss.

FICOH is just one of the sources of substantial losses for cat reinsurers resulting from the shock wildfire event, with many of the insurers impacted buying down to relatively low attachment points.

The Tokio Marine company is one of a handful of small domestic firms that write 100% of their business in Hawaii.

According to Moody’s figures, FICOH is the largest writer of commercial property in the state overall, while it also writes homeowners’ insurance.

Karen Clark & Company has estimated that the Lahaina Fire could result in losses of $3.2bn and is likely to be the second largest insured loss in the state’s history.

In late August, RLI disclosed $65mn-$75mn in net Hawaiian wildfire losses in its Q3 results.

This story has been updated to reflect that Philadelphia Insurance Companies does not own FICOH. Both companies are owned by Tokio Marine.