Japan events drive Swiss Re Q3 nat cat loss to $1.1bn
Swiss Re estimates its preliminary combined claims burden from recent large natural catastrophes in the third quarter of 2018 at approximately $1.1 billion, net of retrocession and before tax, dominated by weather-related losses in Japan.
Swiss Re expects reinsurance claims from Typhoon Jebi at $500 million. Jebi was the strongest typhoon to strike Japan since typhoon Yancy in 1993. It made landfall over Shikoku and, on Sept. 4, 2018, over the Kansai region of Japan as a category 5 typhoon. Kansai International Airport, one of the most important transport hubs in Japan, was closed due to flooding. According to Swiss Re estimates, total insured market losses for Typhoon Jebi are expected to be at approximately $6 billion.
Swiss Re’s claims burden from hurricane Florence is expected to be $120 million. This will impact both the reinsurance and corporate solutions business units. Florence made landfall in North Carolina on Sept. 14, 2018. It caused high coastal storm surges across North and South Carolina and torrential rains in the days that followed. Swiss Re estimates total insured market losses for hurricane Florence in the region of $4 billion.
A number of further natural catastrophes, mainly in Japan (including torrential rains/floods, typhoon Trami) and North America (such as the Carr wildfire in California and a windstorm in Ontario) aggregate to another $500 million of large losses for Swiss Re in the quarter.
In addition, multiple large man-made disasters are expected to generate approximately $300 million in claims for Swiss Re in the third quarter, the impact of which is expected to be almost equally distributed between the reinsurance and corporate solutions business units. Large man-made disasters which either occurred or deteriorated in the third quarter of 2018 include, among others, the collapse of the Genoa motorway bridge in Italy, a shipyard fire in Germany and the Ituango dam flooding in Colombia.
Swiss Re's group chief underwriting officer, Edouard Schmid, said: "We extend our deepest sympathies to those who have been affected by these catastrophes. We are working very closely with our clients and partners to help rebuild as quickly as possible. With our strong capital position and high financial flexibility, we are able to react fast when our clients need us most. We also want to stress our continued commitment to providing capacity in Japan, where we demonstrated our steadfast support following the earthquake off the coast of Honshu in 2011."
While the third quarter losses are large for an individual quarter for Swiss Re, the cumulative losses for the first nine months are broadly in line with year-to-date expectations, the company said.
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