Arch to take hit of up to $190m from catastrophes
Bermudian-based re/insurer Arch Capital Group Ltd has reported that its first-quarter results will be negatively impacted by the effects of North American winter storms Uri and Viola that occurred in February, as well as from other minor global events.
As a result, the company said it has established a range of pre-tax catastrophe losses of $180 million to $190 million in the first quarter across its property casualty insurance and reinsurance segments, net of reinsurance recoveries and reinstatement premiums.
Included in these estimates, Arch said, is a de minimis amount for ongoing exposure to Covid-19 global pandemic claims in the current accident quarter.
The company said initial estimates for winter storms Uri and Viola are based on a range of industry insured losses of $14 billion to $16 billion.
It said the losses are currently expected to be split approximately 80/20 per cent between the company’s reinsurance and insurance businesses, respectively.
At this time, the company said there are significant uncertainties surrounding the ultimate number of claims and scope of damage resulting from these events.
The company’s estimates across its insurance and reinsurance segments are based on currently available information derived from modeling techniques, including preliminary claims information obtained from the company’s clients and brokers, a review of relevant in-force contracts and estimates of reinsurance recoverables.
These estimates include losses only related to claims incurred as of March 31, the company said. Actual losses from these events may vary materially from the estimates due to several factors, including the inherent uncertainties in making such determinations.
Arch said the loss estimates exclude the operations of Watford Holdings Ltd. Pursuant to GAAP, the company said it consolidates the results of Watford in its financial statements, although it only owns approximately 10 per cent of Watford’s outstanding common equity.
Arch is set to release its first quarter results after the close of financial markets on April 27.
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