Arch Capital suffers up to $560 million in Q3 nat cat losses

Arch Capital likely suffered $530 to 560 million in third quarter pre-tax catastrophe losses, net of reinsurance and reinstatement premiums, as Hurricane Ian topped off a Q3 cat array including U.S. convective storms, Typhoon Nanmadol and the June French hailstorms.

The estimate is above the $425 million Visible Alpha consensus estimate of the likely Q3 cat loss, cited by Wells Fargo in a note to clients.

Arch built its forecast from total loss estimates on Hurricane Ian ranging from $50 to 60 billion, later cut to Arch’s standard market share from prior comparable events, management said. Losses on Hurricane Ian should be booked 70% to Arch’s reinsurance business and 30% to primary.

The Ian estimate taken against Arch market share implies a neighbourhood $440 million loss on Ian and circa $105 million from the remaining events, analysts at Wells Fargo said.

“Significant uncertainties” remain around the eventual claims count, scope of damages and reinsurance recoverables, Arch says by way of caveat.

Ian’s landfall timing right at the end of the third quarter further forces shortcuts in estimations “with limited knowledge of the actual insured damage that may have been sustained during the event.”

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