Everest Re expects $300m of net Q3 catastrophe losses

Global insurance and reinsurance group Everest Re has pre-announced that it expects to report around $300 million of pre-tax and net catastrophe losses for the third-quarter of 2020.

Despite these losses, which are after accounting for any retrocessional reinsurance recoveries made, Everest Re’s CEO said that the company will still report “significant net income and positive net operating income ” despite the impact of hurricane activity and other major events.

Everest Re underwrites a significant portfolio of catastrophe exposed property business and, as one of the largest reinsurers in the U.S. market, it will always take a reasonably large share of impacts from named tropical storm season loss activity.

The pre-tax net catastrophe loss estimate of $300 million, which is after accounting for reinsurance and reinstatement premiums, includes Everest Re’s losses from Hurricanes Laura, Isaias and Sally, wildfires in California and Oregon, and other events including the Midwest United States Derecho windstorm.

Juan C. Andrade, Everest CEO stated, “Our thoughts and sympathies go out to all those affected by these recent catastrophe events. Everest provides meaningful capacity and valuable solutions to our customers, helping communities rebuild when events such as these take place.

“Despite the industry catastrophe losses during the quarter, Everest expects to report significant net income and positive net operating income for the third quarter of 2020, a reflection of the strength and diversification of our business.”

As always, we would highlight that with any major insurance market catastrophe losses, there is a chance some of the impact will have been shared with investors in Everest Re’s collateralised reinsurance sidecar-like vehicle Mt. Logan Re.

Mt. Logan Re supports Everest Re’s catastrophe exposure, through the sharing of underwriting returns and also losses with third-party investors through an aligned strategy.

However, any losses ceded to Mt. Logan Re from the recent catastrophe loss activity are unlikely to be particularly significant, more attritional in nature based on where Everest Re’s loss estimates currently sit.