Zurich Insurance Group said this morning that it expects to record a loss in the fourth-quarter of 2015 in its General Insurance business, due to natural catastrophe claims including the impact of UK storms and flooding, even after reinsurance recoveries.
Zurich’s announcement today gives a good example of how the attrition of recent catastrophe and severe weather events in the last quarter of 2015 are going to hit some of the larger players, which could make for an interesting results season to come. They also give some indication of where reinsurance impacts from the UK storms and floods may come from, which as we’ve reported have resulted in some limited exposure for ILS funds.
Zurich revealed an expected aggregate loss of approximately $275 million within its 2015 results due to the flooding caused by heavy rainfall from storms Desmond, Eva and Frank in the UK and Ireland. This estimate is net of reinsurance and before tax, but also subject to increase as Zurich noted uncertainty due to “the nature of many of the losses and the extended remediation period to complete repairs.”
As well as the UK floods Zurich also suffered losses from a number of other catastrophe events during the quarter, including a tornado in Australia, the insurer said.
Additionally the insurer said that it has experienced a “very high level of large current accident year losses in the fourth quarter,” including a large credit and surety loss, and a number of significant property claims, in its Global Corporate account and certain European countries.
As a result of the adverse natural catastrophe experience and the high level of large current accident year claims, Zurich said it expects its General Insurance business will report a business operating loss of approximately $100 million for the fourth quarter of 2015.