Typhoon Jebi losses are double previous market estimates, Sirius suggests
Bermuda-based Sirius Group had a particularly challenging end to the year with substantial cat losses, in particular carried over from Typhoon Jebi, which it expects has created a market-wide loss in excess of $10 billion - double the size of previous estimates.
Pre-tax catastrophe losses were $114 million in the fourth quarter, attributed to Hurricane Michael ($36 million), the California wildfires ($12 million), and other small catastrophe losses.
Prior 2018 catastrophe losses were increased also in the quarter, relating to Typhoon Jebi ($43 million), Typhoon Trami ($7 million), and Typhoon Mangkhut ($3 million).
"During the quarter, we added $43 million to our Typhoon Jebi reserves, bringing our total loss from the late third quarter event to $91 million, net of reinsurance and reinstatement premiums,” said Ralph Salamone, chief financial officer at Sirius Group.
“We believe this now implies a market loss for Jebi is now in excess of $10 billion — twice the loss estimate that some market sources had suggested in September.”
At the end of 2018, Sirius posted a comprehensive loss of $80 million, compared with a loss of $78 million for 2017.
In the fourth quarter of 2018, Sirius made a comprehensive loss of $136 million, compared with an income of $17 million for the same period in 2017.
Kip Oberting, president and CEO of Sirius Group, suggested the financial loss during the fourth quarter - arising from storm losses and pockets of loss reserve development - had overshadowed some of the more positive developments in the quarter such as achieving a public listing and adding a group of independent directors to its board.
"Despite this recent volatility, we continue to build upon our unique franchise," said Oberting. "Despite recent high levels of global cat activity, our property reinsurance business remains core to our long term success. In this business, as in the others, we find honest, capable partners and clients. We treat one another fairly. Together we thrive. It's a long game."
The fourth quarter also saw Sirius Group’s combined ratio increase to 127 percent, compared with 91 percent for the fourth quarter of 2017. This was driven by higher catastrophe losses and net unfavourable prior year loss reserve development.
Sirius Group’s gross written premium for the full year were $1.82 billion, an increased of 27 percent year-on-year, said to have been driven by top line growth in the specialty & casualty and global property segments.