Arch reveals cat loss estimates
Arch Capital Group reports that its 2022 third quarter results will be negatively impacted by the effects of Hurricane Ian, as well as from a series of other global events that occurred this year, including US convective storms, Typhoon Nanmadol and the June French hailstorms.
As a result, Arch has established a range of pre-tax catastrophe losses of $530 million to $560 million in the 2022 third quarter across its property casualty insurance and reinsurance segments, net of reinsurance recoveries and reinstatement premiums.
Arch says its estimate for Hurricane Ian is commensurate with a range of estimated insured losses across the global property/casualty insurance industry of $50 billion to $60 billion for this event, resulting in an approximate market share of industry losses for the company that is comparable to prior natural events of a large magnitude. The losses are currently expected to be split approximately 70 percent/30 percent between the Arch’s reinsurance and insurance businesses, respectively.
“At this time, there are significant uncertainties surrounding the ultimate number of claims and scope of damage resulting from these events,” Arch said, adding that the estimates across its insurance and reinsurance segments are based on currently available information derived from modelling techniques, including preliminary claims information obtained from its clients and brokers, a review of relevant in-force contracts, and estimates of reinsurance recoverables.
These estimates include losses only related to claims incurred as of September 30.
“Actual losses from these events may vary materially from the estimates due to several factors, including the inherent uncertainties in making such determinations,” Arch said.
For Hurricane Ian, in particular, the timing of the event late in the third quarter increases the uncertainty in the company’s estimates, as it is relying on a preliminary view of the claims that may be reported, with limited knowledge of the actual insured damage that may have been sustained during the event.
Arch Capital Group is a publicly listed Bermuda exempted company with approximately $15.1 billion in capital at June 30 that provides insurance, reinsurance and mortgage insurance on a worldwide basis through its wholly owned subsidiaries.
