Swiss Re Shoulders $1.1 Billion from Nat CAT Claims in Third Quarter

In the third quarter of this year, Swiss Re estimated it will shoulder combined claims costs of $1.1 billion from recent natural catastrophes (net of retrocession and before tax).

Typhoon Jebi was the strongest typhoon to strike Japan since Typhoon Yancy in 1993. It made landfall over Shikoku and, on September 4, 2018, over the Kansai region of Japan as a category 5 typhoon. According to Swiss Re estimates, total insured market losses for Typhoon Jebi are expected to be at approximately $6 billion. Swiss Re said it is a leading reinsurer in the Japanese market and expects to incur $500 million of reinsurance claims for Typhoon Jebi.

Hurricane Florence made landfall in North Carolina on September 14, 2018. It caused high coastal storm surges across North and South Carolina and torrential rains in the days that followed. Significant inland flooding continued as the storm dissipated, causing damage from floods and high water. Swiss Re has estimated total insured market losses for Hurricane Florence in the region of $4 billion, of which its own claims burden is expected to be $120 million.

A number of further natural catastrophes, mainly in Japan (including torrential rains/floods and Typhoon Trami) and North America (such as the Carr Wildfire in California and a windstorm in Ontario) aggregate to another estimated $500 million of large losses for Swiss Re in the quarter.

The third quarter showed a significant increase in man-made losses in industrial business lines. Multiple large man-made disasters that either occurred or deteriorated in the third quarter of 2018—including, among others, the collapse of the Genoa motorway bridge in Italy, a shipyard fire in Germany, and the Ituango dam flooding in Colombia—are expected to lead to approximately $300 million in claims for Swiss Re.

While the third-quarter loss estimates are large for an individual quarter for Swiss Re, the cumulative losses for the first 9 months are broadly in line with year-to-date expectations.

Swiss Re reported that 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.