Swiss Re Estimates Its Fourth Quarter 2018 Claims Burden From Large Natural Catastrophes At USD 1.0 Billion

Both Californian fires, the Camp fire and the Woolsey fire, broke out on 8 November 2018. Due to very dry weather conditions, the fires spread quickly. The Camp fire destroyed the town of Paradise, being one of the deadliest and most destructive fires on record in the US. Over 52 000 people were evacuated from the Camp fire. The Woolsey fire in Los Angeles and Ventura Counties was also very destructive, prompting the evacuation of more than 295 000 people. Both fires raged over a week, claimed over 85 lives and destroyed thousands of acres and over 20 000 buildings. Swiss Re expects an overall industry loss for both fires of USD 16 billion.

Hurricane Michael made landfall just northwest of Mexico Beach, Florida, in the afternoon on 10 October 2018 as a strong category 4 hurricane with maximum sustained winds near 155 mph and even higher gusts. Hurricane Michael is the strongest storm to hit Florida since Hurricane Andrew (1992). Swiss Re expects an overall industry loss for Hurricane Michael of USD 8.5 billion.

Swiss Re's estimate for Typhoons Jebi and Trami increased by USD 320 million in Q4 2018, leading to a total loss burden from major Japan events in 2018 of USD 1.2 billion, net of retrocession and before tax. Swiss Re expects an overall industry loss for the Japan events of USD 12 billion.

The last quarter of 2018 was also impacted by several large man-made disasters, including, among others, a major satellite loss, a large industrial fire in Germany and a further increase in the estimated claims of the Ituango dam flooding, causing expected combined claims of USD 0.3 billion. This claims burden is expected to be roughly equally distributed between the Corporate Solutions and Reinsurance Business Units.

"The last quarter of 2018 was severely impacted by natural catastrophes. In the US, Hurricane Michael was the strongest storm to hit Florida since Hurricane Andrew in 1992 and in California, wildfires caused great damage as they also spread to urban areas", says Edouard Schmid, Swiss Re's Group Chief Underwriting Officer. "We are working closely with our clients to ensure affected people and communities are supported and able to get back on their feet as soon as possible."

According to preliminary sigma estimates, global insured losses from catastrophes for the whole industry were USD 81 billion in 2018, the fourth highest on sigma records.

The foregoing estimates are subject to a higher than usual degree of uncertainty and may need to be subsequently adjusted as the claims process continues.

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Swiss Re

The Swiss Re Group is one of the world’s leading providers of reinsurance, insurance and other forms of insurance-based risk transfer, working to make the world more resilient. It anticipates and manages risk — from natural catastrophes to climate change, from ageing populations to cyber crime. The aim of the Swiss Re Group is to enable society to thrive and progress, creating new opportunities and solutions for its clients. Headquartered in Zurich, Switzerland, where it was founded in 1863, the Swiss Re Group operates through a network of around 80 offices globally. It is organised into three Business Units, each with a distinct strategy and set of objectives contributing to the Group’s overall mission.

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