Large U.S. primary insurer Travelers has announced its preliminary estimate of catastrophe losses from the January 2025 California wildfires at $1.7 billion before tax ($1.3 billion after tax).
The carrier explains that its estimate includes losses from both the personal and commercial segments, including the Fidelis quota share, as well as estimated assessments from the California FAIR Plan, and reinsurance recoveries.
Alan Schnitzer, Chairman and CEO of Travelers, stated, “In moments like these, actions speak louder than words.
“As a company deeply embedded in the communities we serve, we are on the ground providing critical resources and support that our customers and neighbors need to recover and rebuild. We also extend our heartfelt appreciation to the first responders and relief organizations working tirelessly to aid those impacted by this tragedy, as well as to our claim professionals, who consistently go above and beyond to uphold the Travelers Promise to our customers and distribution partners.”
Travelers recently raised the retention limit on its catastrophe excess-of-loss (XoL) reinsurance treaty for 2025 by $500 million, but given the tower has a retention of $4 billion, the reinsurance recoveries for the LA wildfires aren’t from this reinsurance arrangement.
The insurer does have numerous other reinsurance arrangements in place, and from what we can tell, these recoveries could have come from the firm’s other international reinsurance treaties, specifically via Lloyd’s.
However, we can’t be certain, and it’s also possible that the reinsurance recoveries from the California wildfires relates to other, undisclosed private reinsurance arrangements.
The company also recently reported improved underwriting results for both the fourth quarter and full year 2024.
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