XL estimates $315m in Q4 cat losses

  • Destructive force: XL expects wildfires that raged through Southern California last month to cost it around $45 million in net losses

XL Catlin has estimated catastrophe losses totalling about $315 million for the fourth quarter of last year.

In addition, the Bermudian-based global insurer and reinsurer will recognise a one-time charge of around $98 million in relation to US tax changes enacted by the Tax Cuts and Jobs Act.

The charge relates to a revaluation of deferred tax assets and XL said the actual charge would depend on fourth-quarter results.

But the company added: “Based on XL’s preliminary assessment, XL does not currently expect US tax reform to have a material impact going forward on its average global effective tax rate.”

In a catastrophe loss update today, XL announced a preliminary estimate of about $45 million in net losses related to the recent wildfires in Southern California and another $20 million related to other events.

XL had previously estimated losses of around $250 million related to the October 2017 Northern California wildfires and other events.

The company also reaffirmed its previously disclosed aggregate net pre-tax losses of $1.48 billion, related to the third-quarter 2017 catastrophes, including those related to hurricanes Harvey, Irma and Maria.

“Since these events, XL has continued to pay claims and receive reported loss information from its clients and brokers,” the company stated.

“Ongoing assessment has resulted in approximately 6 per cent of the third quarter 2017 aggregate net losses being reallocated from the reinsurance segment to the insurance segment.”

XL expects to announce its fourth-quarter results after financial markets close on February 1.