catastrophe losses

U.S. primary carrier Farmers Insurance Group has announced that initial estimates point to an expected loss of $600 million for the Los Angeles wildfires, net of its per-occurrence reinsurance coverage and gross of tax, and a roughly $250 million reinstatement premium payment.

Over the course of 2024 there were a number of recoveries made under catastrophe bonds, however these were primarily driven by cat losses that occurred in prior years, in particular both hurricane’s Ian and Otis, according to Swiss Re Capital Markets, the investment banking and insurance-linked securities (ILS) division of reinsurance giant Swiss Re.

We’re told by sources that the secondary market price for the $100 million Class A notes of Farmers Insurance Group’s Topanga Re Ltd. (Series 2021-1) catastrophe bond has recovered further, as the cat bond market views the risk of principal losses from the California wildfires as having declined.

According to the California Department of Insurance, the insurance industry has paid $6.94 billion in residential and commercial claims to consumers in Southern California, related to the Los Angeles wildfires, as of February 5th, 2025.

The potential for subrogation recoveries to be made if a utility is deemed responsible for its equipment starting one of the recent wildfires in Los Angeles, California, may be the deciding factor in whether insurer Mercury claims for the fires as one event or two under its reinsurance, the firm’s CEO said yesterday.

Insurance industry losses for the flooding related to the remnants of Hurricane Debby that affected Ontario and Quebec between August 9th and 10th, 2024, is estimated to have reached CAD 2.817 billion, according to CatIQ, Canada’s insured loss and exposure indices provider.

With the recent California wildfires seen as likely to drive the second most costly first-quarter on record for the global insurance and reinsurance industry, AIG CEO Peter Zaffino has warned that a $200 billion annual catastrophe loss year in 2025 could “recalibrate the entire industry.”

Mercury, an insurer with a meaningful exposure to claims from the Los Angeles, California wildfires, said it estimates gross losses of $1.6 billion to $2 billion, but while significant reinsurance recoveries will be made the company noted that a parametric reinsurance arrangement is not expected to pay out.

US primary insurer Travelers has announced its preliminary estimate of catastrophe losses from the Los Angeles, California wildfires at $1.7 billion before-tax ($1.3 billion after-tax) and the company says these figures are net of reinsurance recoveries.

Insurance industry losses from the severe hailstorm that struck the Calgary area of Canada on August 5th 2024 is estimated to have reached CAD $3.25 billion, according to CatIQ, Canada’s insured loss and exposure indices provider.