XL outlook deteriorates due to nat cat losses
Fitch Ratings has reduced the outlook for Cayman Islands-based XL Group subsidiary XL (XLIT) and its property/casualty re/insurance subsidiaries to negative after “a meaningful deterioration in capitalization” following third-quarter nat cat losses.
XL has incurred approximately $1.48 billion (pre-tax) of net natural catastrophe losses in the third quarter of 2017, primarily from Hurricanes Harvey, Irma and Maria. As a result, XL experienced an 11 percent decline in shareholders' equity to $11.5 billion at Sept. 30, 2017 from $13.0 billion at year-end 2016, according to the ratings agency.
The negative outlook also reflects the potential for upward revisions to the company's current loss estimates, given the uncertainty in estimating losses for the recent catastrophe events, as well as the possibility of additional significant loss events occurring as the company looks to replenish its capital. Favourably, XL has over $3 billion of reinsurance protections remaining to respond to further catastrophe losses in 2017.
At the same time, Fitch Ratings has affirmed the ratings of XLIT and its property/casualty re/insurance subsidiaries. The affirmations include the Insurer Financial Strength (IFS) rating of its core operating companies at 'A+' (Strong) and XL's senior unsecured debt at 'BBB+' and Issuer Default Rating (IDR) at 'A-'.
Fitch's affirmation of XL's ratings reflects the company's very strong business profile and
improving underlying underwriting results. Partially offsetting these positives are low fixed charge coverage and Fitch's negative sector outlooks on global reinsurance and US property/casualty insurance, according to the statement.
Get the latest re/insurance news sent to your inbox every day - Sign up to our free email newsletters
Other stories from Monday's newsletter
Aon acquires Henderson Insurance Broking Group in UK expansion
Ironshore appoints specialty executives in US, London Market
New insurtech MGA Wrisk raises £0.5m through crowdfunding
Markel CATCo raises over $1.8bn
R&Q agrees with ProSight Specialty Insurance to manage Syndicate 1110
Global insurance M&A activity slow in 2017
R&Q unit partners with Atlas General
More articles
Copyright © intelligentinsurer.com 2024 | Headless Content Management with Blaze