Wildfire

Jonathan Rinderknecht was arrested Tuesday on destruction of property charges.

The model becomes the second in the state to get approval to affect ratemaking applications.

Mercury’s recovery from the guaranteed percentage of losses is $47mn.

This comes in at the lower end of the initial spread guidance of 725-775 bps.

The Californian insurer had a private deal, Randolph Re, that provided pure wildfire protection.

Up to nine million acres of US land are considered likely to burn.

The CEO said private ILS funds can generate additional returns of 10%-20%.

Private ILS would benefit from extension spreads to manage investor concerns, the CEO argued.

The insurance industry has experienced mounting losses from severe convective storms.

Premiums ceded to the ILS vehicle increased by 76% to $433mn.

Commissioner Lara also proposed a $500mn cash infusion from parent State Farm.

Island appetite remains stable, but early 2025 loss activity has injected fresh uncertainty.

The bond was trading at around 12.3c on the dollar in the secondary market last month.

“We do not have the luxury of time,” he said during the Bermuda Risk Summit.

This came as the market’s underwriting profit dipped 10% for 2024.

There is the potential for cat bond H1 issuance to be a record breaking six months.

As of 14 February, the company received 405 claims.

The London D&F market will shoulder most of the losses.

The reinsurer pegged the market loss at $40bn.

The carrier pegged its LA wildfire losses at EUR140mn.

Dispersion of returns was high, with the range 0.87% to -3.71%.

The programme structure was expanded, but it is unclear what percentage was placed.

The cost of reinstatement was included in $170mn wildfire net loss figure.

Climate change and other loss impacts were not adequately incorporated, sources said.

State Farm General has asked California regulators for an emergency rate increase.

Hurricane Milton accounted for 60% of the firm’s Q4 large loss tally.

The carrier expects the market loss to land at $35bn-40bn.

The carrier has paid $1.75bn on around 9,500 claims filed from the wildfires.

The carrier estimated January cat losses of $1.08bn, or $849mn after-tax, including the fires.

Wildfire loss ‘serves as a strong reminder not to unwind hard-fought for rates and terms’, the executive said.

The carrier said 72% of those losses occurred in personal property.

A higher loss quantum will put a greater burden on retro programmes.

The estimate is net of its per-occurrence reinsurance program and gross of tax.

Insurers have paid $6.9bn in Southern California wildfire claims in the first four weeks of recovery.

The loss aggregator has classified the fires as two separate events for reinsurance purposes.

Wildfire is rarely singled out as an exposure that can shift portfolio outcomes.

The fall marks this the first time in 20 years the index has been negative in January.

More than 33,000 claims had been filed as of 5 February.

The firm will match segregated accounts of portfolios to investor mandates.

The carrier is “extremely well capitalised” to achieve its strategic ambitions.

The insurer disclosed the estimates as it seeks emergency rate hikes from regulators.

The company will ‘aggressively pursue subrogation’ for the Eaton Fire.

The LA fires ‘demonstrate the magnitude of tail events not well captured in modelling’.

Ultimate losses from the Palisades, Eaton and Hurst fires are estimated at $4bn.

The LA-based firm estimated gross cat losses in the range of $1.6bn-$2bn.

The carrier’s reinsurance premiums ceded rose by 32% to $3.4bn in 2024.

CFP has a $900mn reinsurance attachment point and is still receiving claims daily.

AuM remains generally flat at UCITS funds over the weeks since LA fires started.

FY24 disclosures show shifting fortunes at reinsurer ILS platforms.

But cat bonds are experiencing negative secondary market price movement.

The carrier is likely to exceed its Q1 large-loss budget due to the California wildfires.

The carrier disclosed it will book $1.1bn in net losses from the California fires.

The group ceded 55% more premium to Nephila over the year at $1.3bn.

The carrier has been reducing its presence in the state since 2007.

The carrier has recognised two separate losses for the Palisades and Eaton fires.

The company says the recent wildfires will be the costliest in its history.

Programs did not offer adequate risk-adjusted return.

A negative January return will be unprecedented for ILS industry.

The company’s reinsurance business also has some exposure, the executive said.

The carrier has around $2.5bn-$4bn of reinsurance cover specifically for California risk.

The bond went on watch after Mercury said it would exceed its $150mn retention.

The Floridian also expects to report its “best earnings quarter” for Q4 2024.

The figure does not include specie or auto losses.

Secondary pricing on the carrier’s Topanga Re bond partly recovered following the guidance.

The company received over 10,100 home and auto claims as of January 27.

Compared with its initial figure, CatIQ’s latest estimate has increased by 40%.

Secondary market pricing indicated anticipated California wildfire losses.

Guy Carpenter said personal lines exposure would account for 85% of the aggregate loss.

Fitch said 1Q wildfire losses could add 6% to 10% to Mercury’s CoR.

The total includes fire and smoke damage plus living expenses for evacuees.

The fire started Wednesday morning and is currently 0% contained.

The carrier’s Milton loss came in below expectations, but its fire claims will be “material” in Q1.

Losses from the larger fire will amount to $20bn-$25bn, the modeller said.

Two 2021 worldwide aggregate ILW notes are also among the markdowns.

The carrier has received more than 3,600 claims from LA wildfires.

There are many unknown factors including insurance gaps, high-value property and damage to critical infrastructure.

The anticipated portion ceded to reinsurance may reach the mid-to-high single-digit billions, it added.

This will be the most expensive fire in the state’s history, it said.

A $30bn industry loss would use one-third of Big Four’s 2025 cat budgets.

ILS managers expect the losses to have some impact on future cat bond spreads.

Sources say the Fair Plan is under-reserved, leading to the possibility of member assessment.

The carrier is the largest writer of homeowners’ multi-peril in the state.

The Palisades fire is estimated at $9bn-$12bn, while Eaton is $6bn-$8bn.

Investigators are homing in on the likely causes of the incidents.

The number of structures damaged may put the event on par with the fires of 2017 and 2018.

The company’s stock price has plummeted in the wake of the LA wildfires.

Total economic and insured losses are “virtually certain” to reach into the billions.

AM Best said it expects insured losses from the California wildfires to be “significant”.

Plenum said impact is marginal because wildfire contributes only marginally to the risk of bonds.

Moody’s also expects losses in the billions of dollars.

Six wildfires are now burning in SoCal, with the Palisades fire being the largest.

Six fires now cover more than 27,000 acres across Southern California.

Hurricane Milton resulted in the largest insured loss of the year at $25bn.

The fast-moving blazes have prompted evacuations across the city.

More than 4,000 acres are burning as thousands evacuate.

Homeowners’ insurance rates have spiked almost 60% since 2018.

The regulations are part of a state effort to expand wildfire coverage.

The bond will provide multi-peril coverage in the US and District of Columbia.

The bond is split into three tranches of notes.

Key floods this year outside of the US include the Rio Grande do Sul.

The broker replaces Goldman Sachs on the business after the bank ceased offering ILS services.

The effort will draw from California’s research and higher education communities.

The estimate from the Perils-owned company does not include any losses from Hurricane Debby.

The rate change will be implemented in November.

The Insurance Bureau of Canada said the blaze damaged one-third of the Jasper community.

The regulations have been officially published online, with a hearing to be held next month.

The ratings agency warns that wildfire is an increasingly risky and unpredictable peril.

Its Class 13 and 14 notes priced roughly at the midpoint of expectations.

The partnership seeks to serve corporates with captives, Lloyd’s syndicates and ILS funds.

The cover will be triggered on an indemnity, annual aggregate basis.

He will oversee the syndicate’s catastrophe modelling capabilities.

The RfP covers the CEA and/or the California Wildfire Fund.

Insured loss estimates are not yet available.

The insurer confirmed it would be targeting 77% of the original principal amount.

The carrier has also lifted the effective coupon to 29.9%.

The sponsor had initially sought $150mn of coverage last month.

American Family had initially sought $150mn of coverage before scaling the bond to $175mn.

The sponsor is seeking coverage for named storms, winter storms, wildfire, earthquake and severe thunderstorms in the US.

The US peak peril cat bond has upsized to $325mn from an initial target of $200mn.

High Point Re is Selective’s debut cat bond.

All 50 US states and the District of Columbia are covered by the bond.

Hannover Re said it was in discussions with retro partners about buying less in 2024.

The group’s ceded large losses reached 17% of gross losses, up from 11% a year ago.

The bond is offered with price guidance in the range 500-575 basis points.

“That’s one of the things we're monitoring ... but I think there are positive signs in the marketplace that litigation is down,” Garateix told analysts on the company’s third-quarter earnings call.

Asagao VI is fourth largest private cat bond deal this year.

By region, convective storms in the US alone accounted for 60% of global insured losses.

Experts agreed that investment in understanding wildfire risk had come a long way in recent years.

Lara's plan, backed Thursday by an executive order from California Governor Gavin Newsom, repackages elements of a proposed bill that collapsed earlier this month.

Carriers have announced significant exposure reductions in the state this year.

Total losses for the year from April now exceed $3.5bn.

The estimate includes privately insured damage to residential, commercial and industrial property, as well as automobiles. Boats, offshore properties and NFIP losses were excluded.

The reinsurance broker said the losses will fall on the higher end of industry loss ranges.

The estimate is based on the impact to approximately 200 structures where RLI provided primarily homeowners’ insurance.

Large carriers with geographic spread across the continental US will have the capital and reinsurance coverage to absorb losses related to the wildfires, according to AM Best.

The agency put insured property values in the burn footprint at $2.5bn to $4bn, which marks an uptick compared to Moody’s estimate from last week, when the agency pegged insured losses at around $1bn.

Homeowners’ and commercial insurance policies typically exclude floods, mudslides, debris flow and other similar disasters unless directly or indirectly caused by a recent wildfire.

"Finally we feel things are moving forward," says West Kelowna fire chief Jason Brolund.

The development in reconstruction costs and contingent BI claims may put the ultimate sum beyond current estimates.

The latest estimates peg the fires as the second largest loss event in the state’s history, second only to Hurricane Iniki in 1992.

Primary writers of homeowners and commercial property are exposed, while reinsurers could face wildfire losses.

The modelling agent estimated that the total number of buildings within the fire perimeter is approximately 3,500.

Tens of thousands of people have been evacuated from the island, and nearly 14,000 Maui residents remain without power.

The broker said the risk from wildfire is also set to increase substantially.

Compelling rates are on offer for markets willing to write wildfire risk in the sunshine state.

The comment comes after major US carriers pulled back from new business in wildfire-prone California.

The multi-peril bond will cover all 50 US states and the District of Columbia.

Brian Espie has been appointed as CUO having previously held the position of group head of North American reinsurance at Fidelis.

The deal includes $65mn of Class B discounted notes which offer an effective coupon of 25%.

The Class A notes on the latest deal are offering 250 bps more compared with a similar placement last March.

The deal has secured $100mn of limit for insurer American Family, rather than pushing out to a $125mn top-end target.

The modelling firm noted a shift towards stronger hurricanes making landfall.

The modeler warned that climate change was increasing the chances of $20bn, $30bn and $40bn loss events.

The American Family bond will provide US wind, quake and wildfire cover.

The bond will provide coverage up to 2026, extendable to 2029.

The cover is triggered by PCS territory-weighted industry loss and attaches at $12.5bn.

The increased yield reflects the harder post-Ian market.

The cover will be triggered by territory-weighted annual aggregate industry loss.

The firm said a new CUO hire is pending.

If Hurricane Andrew were to hit the coastal regions of Florida today, insured losses would be nearly four times the $15.5bn borne by carriers 30 years ago.

France’s Gironde region struck by serious wildfire outbreak

The parties will develop climate-conditioned wildfire event catalogs to support cat modelling.

The McKinney and Oak fires are 0% and 67% contained, respectively.

Initial loss estimates from convective storms and flash flooding place the economic impact in the hundreds of millions, although Aon warned losses may rise further.

A further 3,271 structures, including both homes and businesses, are under threat from the wildfire.

Bosnia & Herzegovina saw a 246% increase in the amount of land burnt in the past year.

Fires in Portugal, Spain, France, Greece and Croatia have caused widespread crop damage.

Storms from 16-23 June added to a “very active” quarter for the peril.

Investors, fund managers and service providers are adapting in the face of potential large losses from secondary perils.

The Bermuda-based InsurTech will deploy a combination of its own and rated paper capital.

Severe convective storms in the US caused hundreds of millions of losses, while a small number of expensive homes in California were hit by a wildfire

The incoming SVP joins from BMS Re, where she led the catastrophe analytics team for more than 10 years.

The company’s new models will be generally available in June for major perils including US flood, US wildfire and Japan typhoons.

The 5%-7% uplift came in ahead of a smaller November gain connected to 2019 catastrophes.

December gains of 0.05% marked the third consecutive positive monthly return.

The company will use the funding to invest in new software hires and expansion in Hong Kong and Madrid.

Pacific Gas and Electric Company told investors in November that it expects to recover $569mn from its insurers on a potential $1.15bn liability relating to the Dixie Fire in California.

The blaze destroyed 1,000 structures and damaged a further 100 in the state’s most destructive wildfire incident.

A heavy snowfall helped to bring the major conflagration under control.

The fires are being fanned by winds of up to 115mph around the towns of Superior and Louisville.

The carrier's first cat bond featured a new subrogation extension mechanism.

Pricing was generally stable but investors are showing more aversion to specific climate-exposed perils, sources noted.

It had previously sought $100mn.

The move comes amid limited availability of annual aggregate cover.

The catastrophe bond offers an increased spread compared to initial guidance.

The target spread has gone up 4% on the high-risk aggregate deal.

The catastrophe bond will take the firm’s cover to $250mn.

The final amount has upsized from the previous $100mn target.

Hurricane Ida was the main loss-making event, but once again secondary perils generated more than half of global losses, according to the latest Sigma report.

The cedant is again seeking multi-peril catastrophe cover in the latest deal.

The fundraise will support collateralised reinsurance deals with the firm initially targeting Californian wildfires.

Farmers Insurance Group is set to sponsor its first catastrophe bond in a two-tranche deal that would provide cover for losses from named storms, severe weather, wildfires and earthquakes, Trading Risk understands.