Everest Re’s fourth quarter 2019 results will include catastrophe losses of approximately $215mn, net of estimated reinsurance recoveries and reinstatement premiums.
The bulk of that $215mn relates to Typhoon Hagibis which Everest Re believes will impact its bottom line by $190mn, again net of estimated reinsurance recoveries and reinstatement premiums.
Tornado losses in Dallas, Texas account for the final $25mn of the total, the Bermudian (re)insurer said in a statement.
The company also said its fourth quarter 2019 figures would suffer from “higher than normal current year losses in the reinsurance crop book related to poor weather conditions in the US and Canada” which will add an estimated $50mn hit to its underwriting results.
Net favourable prior year reserve development of $19mn has helped offset some of these losses, however.
Net investment income of some $146mn, including lower limited partnership income of $6mn, will also positively impact the fourth quarter 2019 result. Everest Re’s net investment income for the fourth quarter of 2018 was $140.2mn.
“For the full year 2019, Everest expects to report about $1bn of net income, resulting in a net income return on equity of 12 percent,” Everest Re said in a statement after the markets closed on Thursday.
“The company continued to see strong rate improvement in most classes of insurance and reinsurance during the fourth quarter of 2019 and at the important 1 January renewal date. The size, scale and financial strength of Everest, combined with a large and well diversified portfolio of business, is allowing the company to continue to capitalise on the favourable market conditions,” the reinsurer added.
In recent weeks, several companies from across the (re)insurance spectrum have issued profit warnings or pre-announced catastrophe losses ahead of the publication of their fourth quarter and full year 2019 results.
Axis warned its figures would include a $140mn pre-tax loss from catastrophes and other weather-related events, and included a pre-tax hit from Typhoon Hagibis. The company ultimately posted an operating profit of $4mn for the period.
Chubb revealed $430mn of pre-tax catastrophe losses – $353mn after tax – from various weather events around the world including the Californian wildfires and Hagibis in Japan. This includes losses that arose from the tornadoes in Texas as well as the civil unrest that erupted in Chile and Hong Kong.
On top of these catastrophe losses, Chubb said its North America agricultural insurance business expects a pre-tax underwriting loss of $23mn, or $18mn after tax.
The Hanover expects its fourth quarter non-catastrophe property losses to exceed expectations by $20mn before taxes. The Worcester, Massachusetts-based insurer said the loss experience was driven primarily by non-catastrophe weather activity in homeowners, as well as large property losses in commercial peril and certain specialty lines.