Swiss Re estimates its preliminary claims burden from recent natural catastrophes in the fourth quarter of 2018 at approximately USD 1.0 billion, mainly affecting Reinsurance, and net of retrocession and before tax.
Swiss Re anticipates claims from the Camp and Woolsey fires in California to be USD 375 million. The claims burden from Hurricane Michael is expected to be USD 150 million. Swiss Re's estimate for Typhoons Jebi and Trami increased by USD 320 million in Q4 2018, net of retrocession and before tax. The total number of claims for natural catastrophes also includes smaller events, such as the Sydney hailstorm on 20 December 2018. In addition, multiple large man-made disasters are expected to generate approximately USD 0.3 billion in claims for the fourth quarter. Swiss Re expects a combined claims burden from natural catastrophes and large man-made disasters of USD 2.9 billion for the full year 2018. For the whole industry in 2018, Swiss Re estimates global insured losses of USD 81 billion.
Both Californian fires, the Camp fire and the Woolsey fire, broke out on 8 November 2018. Due to very dry weather conditions, the fires spread quickly. The Camp fire destroyed the town of Paradise, being one of the deadliest and most destructive fires on record in the US. Over 52 000 people were evacuated from the Camp fire. The Woolsey fire in Los Angeles and Ventura Counties was also very destructive, prompting the evacuation of more than 295 000 people. Both fires raged over a week, claimed over 85 lives and destroyed thousands of acres and over 20 000 buildings. Swiss Re expects an overall industry loss for both fires of USD 16 billion.
Hurricane Michael made landfall just northwest of Mexico Beach, Florida, in the afternoon on 10 October 2018 as a strong category 4 hurricane with maximum sustained winds near 155 mph and even higher gusts. Hurricane Michael is the strongest storm to hit Florida since Hurricane Andrew (1992). Swiss Re expects an overall industry loss for Hurricane Michael of USD 8.5 billion.
Swiss Re's estimate for Typhoons Jebi and Trami increased by USD 320 million in Q4 2018, leading to a total loss burden from major Japan events in 2018 of USD 1.2 billion, net of retrocession and before tax. Swiss Re expects an overall industry loss for the Japan events of USD 12 billion.
The last quarter of 2018 was also impacted by several large man-made disasters, including, among others, a major satellite loss, a large industrial fire in Germany and a further increase in the estimated claims of the Ituango dam flooding, causing expected combined claims of USD 0.3 billion. This claims burden is expected to be roughly equally distributed between the Corporate Solutions and Reinsurance Business Units.
"The last quarter of 2018 was severely impacted by natural catastrophes. In the US, Hurricane Michael was the strongest storm to hit Florida since Hurricane Andrew in 1992 and in California, wildfires caused great damage as they also spread to urban areas", says Edouard Schmid, Swiss Re's Group Chief Underwriting Officer. "We are working closely with our clients to ensure affected people and communities are supported and able to get back on their feet as soon as possible."
According to preliminary sigma estimates, global insured losses from catastrophes for the whole industry were USD 81 billion in 2018, the fourth highest on sigma records.
The foregoing estimates are subject to a higher than usual degree of uncertainty and may need to be subsequently adjusted as the claims process continues.
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