Wildfire
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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.
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The carrier disclosed it will book $1.1bn in net losses from the California fires.
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The group ceded 55% more premium to Nephila over the year at $1.3bn.
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The carrier has been reducing its presence in the state since 2007.
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The carrier has recognised two separate losses for the Palisades and Eaton fires.
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The company says the recent wildfires will be the costliest in its history.
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Programs did not offer adequate risk-adjusted return.
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A negative January return will be unprecedented for ILS industry.
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The company’s reinsurance business also has some exposure, the executive said.
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The carrier has around $2.5bn-$4bn of reinsurance cover specifically for California risk.
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The bond went on watch after Mercury said it would exceed its $150mn retention.
