Chubb’s $450m net of reinsurance Q3 catastrophe losses lower than expected

U.S. primary insurance giant Chubb has today pre-announced an estimate of its third-quarter catastrophe losses, pegging them at $450 million before tax and net of reinsurance, which is below where some industry analysts had expected them to be.

After tax Chubb said that its third-quarter 2018 catastrophe losses would amount to $372 million, again after taking into account any recoveries from its reinsurance program and self-reinsurance.

Analysts at Keefe, Bruyette & Woods (KBW) said that they had expected Chubb to report Q3 catastrophe losses that were closer to $641 million, given the insurers broad exposure to global loss events during the quarter.

Chubb said that its Q3 catastrophe losses were due to over 20 individual weather events including Hurricane Florence in the U.S., a rain and hailstorm in Colorado, Typhoon Mangkhut and Typhoon Jebi in Asia, as well as wildfires in California.

Chubb’s natural catastrophe loss estimate is net of reinsurance, including reinstatement premiums, and are made up of losses to the insurers commercial and personal property and casualty insurance business lines, as well as its reinsurance business.

Chubb is a difficult one to track, for the reinsurance market leakage, these days, not least because of the firms ABR Re, third-party capitalised total-return reinsurer joint-venture it has with Blackrock.

It’s just not possible to know how much of the loss has been passed onto ABR Re, or to Chubb’s private market reinsurance providers, but it’s safe to assume that the investors backing ABR Re will face some impacts from the Q3 loss events, as too will Chubb’s main reinsurance partners.

The fact the loss estimate came out a lot lower than KBW’s estimate could reflect the lack of clarity surrounding the firms cessions to ABR Re, which would make estimating Chubb’s own ultimate loss from catastrophe events very difficult to estimate.