third party liability

While wildfire subrogation recoveries are now being seen across reinsurance and insurance-linked securities (ILS) from utility Pacific Gas and Electricity’s (PG&E) massive $11 billion settlement payments, the flow of recoveries will likely continue thanks to a new agreement from Southern California Edison, as well as possible future agreements.

While Pacific Gas and Electricity (PG&E), the wildfire stricken Californian electrical utility, made its $11 billion of subrogation payments in July, the benefits for insurance-linked securities (ILS) funds are expected to take as long as a year to be fully accounted for in the valuation of their exposed ILS and reinsurance assets.

Some of the loss hit catastrophe bonds sponsored by U.S. primary mutual insurer USAA have benefited from a return of principal with respect to previously made loss payments under certain reinsurance agreements, presumably a sign of wildfire related subrogation recoveries flowing to the benefit of cat bond funds and investors.

The fact that insurance and reinsurance companies sold California wildfire related claims to third-parties may ultimately reduce the amount of subrogation recoveries that flow back to reinsurance and retrocessional interests, it appears.

U.S. primary insurance giant Allstate has recorded a significant $450 million PG&E related subrogation on claims related to the California wildfires, which is the figure reported by the carrier net of reinsurance adjustments.

Pacific Gas and Electricity (PG&E), the California electrical utility worse hit by wildfire losses and claims in recent years, has successfully renewed almost $758 million of insurance coverage against future potential liability claims for fires that its infrastructure was deemed to have started.

U.S. primary insurance carrier Travelers has confirmed that its estimated $400 million PG&E subrogation related recovery will inure to the benefit of its reinsurance panel.

Transmission equipment owned and operated by Pacific Gas and Electricity (PG&E) has been deemed to be the cause of the 2019 Kincade wildfire in Sonoma County California, which could put the company and its insurers on the hook for over $600 million of costs.

U.S. primary insurance carrier Travelers is the first major player to reveal its expectations of making a relatively significant PG&E subrogation recovery, while at the same time revealing $854 million pre-tax catastrophe losses from the second-quarter.

The first California wildfire catastrophe bond transaction to be issued since the severe California season of 2018 has successfully been upsized, with utility Sempra Energy’s SD Re Ltd. (Series 2020-1) deal now set for $90 million.