Wildfire related news and analysis

Global reinsurance firm Swiss Re has reported a lower than anticipated level of losses from the Los Angeles, California wildfires in the first-quarter of the year, helping its P&C Re divisions combined ratio beat analyst consensus, while the company has also reported continued premium growth at the April renewals.

Having been hit hard by the wildfires in California this year and then explained that it would acquire more retrocession to protect its earnings from volatility due to secondary peril loss impacts, Conduit Re has stayed true to its word, purchasing catastrophe hedging for US and global secondary perils, as well as more aggregate retrocession.

Hannover Re is anticipating a roughly EUR 230 million recovery from its retrocessional reinsurance to support its losses from the Los Angeles wildfires, with the majority of that expected to come from the proportional K-Cessions quota share sidecar, Sven Althoff, Member of the Executive Board for Property & Casualty (P&C) said this morning.

Hannover Re has reported going “significantly” above its large loss budget for the first-quarter of 2025 with the California wildfires the main driver at a cost of EUR 631 million, saying that it shared EUR 438 million of its large natural catastrophe losses with insurance-linked securities (ILS) capital sources during the period.

Munich Re reported a quarterly profit of €1.1 billion for the start of 2025 despite suffering the same amount in losses from the California wildfires. But the company also cited “market challenges” and growing pressure at the April renewals and while still expanding in premium terms, did reduce in certain areas like property XL.

Bermuda-based insurance and reinsurance companies are projected to incur gross claim losses nearing US$10 billion stemming from the catastrophic wildfires that swept through Southern California in January 2025, as they make payments to help U.S. policyholders and cedants recover, says the Bermuda Monetary Authority (BMA).

Hiscox Group has reported that assets under management (AUM) at Hiscox ILS, the dedicated insurance-linked securities (ILS) management arm of the global re/insurer, dipped by $100 million to $1.3 billion in the first-quarter on the effects of the California wildfires.

March 2025 was a positive month for the insurance-linked securities (ILS) fund sector, with a strong 0.82% average return across the sector according to the ILS Advisers Fund Index.

Colorado lawmakers have taken a significant step toward reshaping the state’s insurance landscape by advancing legislation that would establish a state-run wildfire reinsurance facility, one that could tap into the catastrophe bond market to help manage growing climate-related risks.

Reinsurance broker Gallagher Re has estimated that preliminary total insured catastrophe losses for the first quarter of 2025 reached $56 billion, which makes it the costliest first quarter for the private insurance market and government-sponsored insurance entities since 2011, and 176% higher than the Q1 decadal average of $20 billion (2015–2024).