U.S. primary insurer Allstate has estimated catastrophe losses for the month of January at $1.08 billion, or $849 million after tax, after accounting for $1.40 billion in estimated reinsurance recoveries related to the California wildfires.
January’s losses reportedly stem from three events, with approximately $1.07 billion attributed to the California wildfires.
The California wildfire event estimate includes reinsurance reinstatement premiums and an estimated California FAIR Plan assessment.
After $900 million in reinsurance recoveries under its per-occurrence tower, the company projected a net loss of $1.1 billion from the event.
However, the firm also noted that every additional $100 million in gross losses would only result in $10 million net, meaning further recoveries would be possible if the gross loss creeps higher, which seems to have been the case.
In May of 2024, Allstate raised the top of its Nationwide excess catastrophe reinsurance tower for the year to just over $7.9 billion, after retentions of $500 million to $1 billion.
In related news, executives from Bermuda-based Conduit Re recently emphasised the significant impact of the California wildfires on the re/insurance market, highlighting the potential for the event to halt rate declines ahead of crucial upcoming renewals.
Speaking at a briefing following the release of the firm’s 2024 results, Neil Eckhart, Executive Chairman, described the California wildfire event as one of the four most serious he has witnessed in his career, comparing it to Hurricane Andrew, Hurricane Katrina, and the World Trade Center attacks.
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