Insurance, reinsurance and financial services group Alleghany has estimated its pre-tax loss from hurricane Matthew as being up to $75 million, net of reinsurance and reinstatement premiums.
Alleghany is the parent of reinsurance firm TransRe which operates the Pangaea collateralized reinsurance sidecars, which could have experienced their share of the loss suffered by Alleghany.
Alleghany said its estimate that its hurricane Matthew loss would remain below $75 milllion, is based on losses from both of its subsidiaries, Transatlantic Holdings, Inc. and RSUI Group, Inc., which each contribute a roughly equal amount of the total.
Alleghany said that its preliminary loss estimate is based on assessment of reported claims, a review of in-force underwritten contracts, estimates of losses due to impacts of wind and other perils such as storm surge and flooding to the extent covered, industry loss estimates from other sources and other factors.
The company notes that its actual loss could differ from this up to $75 million estimate, given the preliminary nature of information currently available.
Being a net of reinsurance estimate this does suggest that Alleghany will utilise some reinsurance capacity to pay for some of its ultimate net loss from hurricane Matthew. It’s entirely possible that the Pangaea Re reinsurance sidecar and its investors could provide some of that capacity.
Alleghany said that it will incorporate the hurricane Matthew loss into its fourth-quarter 2016 results.