Global insurance and reinsurance group Everest Re has added another $160 million to its reserves for claims and losses from the Covid-19 pandemic, with the majority again coming from its reinsurance division.
The company said late yesterday that it expects to report $130 million of largely incurred but not reported (IBNR) claims from its Reinsurance underwriting segment and another $30 million from its Insurance segment.
This adds to the $150 million hit to its business from losses due to the Covid-19 coronavirus pandemic that Everest Re had already reported for the first-quarter of the year, taking the total pandemic hit so far to $310 million.
Most of the Q2 losses are classified as incurred but not reported (IBNR) claims, Everest Re said, coming largely from areas of its business including policies that cover event cancellation and postponement, business interruption and workers’ compensation, with a provision for loss adjustment expenses included in the reserves.
Everest Re said that it made an “updated and thorough review of existing and potential exposures” to come to its Q2 figures for the pandemic, adding that it “continues to evaluate all aspects of our global portfolio.”
Importantly though, at this time Everest Re said that its estimate for losses due to the pandemic, “does not account for legal, regulatory or legislative intervention that could retroactively mandate or expand coverage provisions.”
Again, while the bulk of Everest Re’s losses from Covid-19 look set to flow to its reinsurance unit, there is as yet no ability to understand where the company could cede any of the losses to its Mt. Logan Re Ltd. third-party capital backed collateralised reinsurance sidecar-like vehicle.
In addition, Everest Re also pre-announced $15 million of catastrophe losses from claims related to the rioting and civil unrest in the United States, all falling to its Insurance segment.
Despite these developments, Everest Re said that it “expects to report another profitable quarter during 2020, with positive underwriting income and growth in gross written premium across our platform.”