Everest Re hit by $260m Q1 cat losses, sees Texas winter storms at $15bn

Everest Re, the globally active insurance and reinsurance company, has pre-announced an expected $260 million catastrophe loss load for the first-quarter of 2021, the vast majority of which is from the US winter storms and freezing weather in Texas.

Everest Re has reported its first-quarter losses pre-tax and net, so after accounting for reinsurance or retrocession recoveries and reinstatement premiums.

The re/insurer is basing its estimate for the US winter storms and freezing weather that affected Texas in February 2021 on an industry-loss of $15 billion, which is at the higher-end of most companies ranges.

Everest Re said that it expects $250 million of Q1 catastrophe losses due to what it is calling the Texas winter storms, which reflects just how concentrated the loss event was in that state despite the storms affecting a much wider area.

On the Texas winter storm losses, Everest Re expects $203 million to hit its reinsurance segment, with another $47 million hitting its insurance business.

The remaining $10 million of first-quarter 2021 catastrophe losses that Everest Re has pre-announced are from the flooding that affected New South Wales, Australia during the period, all of which hit the Everest reinsurance segment.

As ever, we’d expect that Everest Re’s fully-collateralized reinsurance vehicle Mt. Logan Re might have helped in shouldering some of the loss burden for Everest from the first-quarter, with its third-party investors perhaps taking some attritional loss as well.

Everest Re Group President & CEO Juan C. Andrade said, “Our thoughts and sympathies go out to all those affected by these recent catastrophe events. We are proud to be able to help communities rebuild when events such as these take place.”

In addition, Everest Re said that it has not added anything to its Covid-19 pandemic loss provision for the first-quarter, with this figure remaining at $511 million, roughly 80% of which remains as IBNR.