Swiss Re expects high costs due to the disasters of 2018
Swiss Re was confronted with many catastrophes in 2018, some of them man-made, which once again resulted in high costs for the reinsurance company. In the fourth quarter, the fires in California and typhoons in Japan had the biggest impact. 2018 will be an expensive year for the insurance industry.
Swiss Re is once again posting record loss totals. The claims burden from major natural catastrophes in the months of October to December alone cost Swiss Re an estimated USD 1.0 billion, the reinsurer announced on Tuesday. The Camp and Woolsey fires in November, for example, cost the company $375 million. Both fires raged for more than a week and caused a total loss of $16 billion for insurers worldwide, according to Swiss Re estimates.
Hurricanes and "man-made" events
Tropical cyclones also shook many parts of the world. Swiss Re estimates its own claims burden from Hurricane Michael in October 2018 at 150 million dollars; Typhoons Jebi and Trami in Japan are likely to have caused costs of 320 million. In total, the industry will be burdened by the events with an estimated 8.5 billion and 12 billion dollars respectively.
In addition, there were catastrophes triggered by human activity, so-called "man-made events". These caused a further USD 300 million in costs. According to Swiss Re, these included a severe satellite loss, a major fire at an industrial plant in Germany and a further increase in the estimated loss burden for the flooding of the Ituango dam in Colombia.
2018, an expensive year for insurers
The total claims burden for Swiss Re from natural catastrophes and "man-made" events is likely to add up to USD 2.9 billion before tax in the 2018 financial year, it adds. However, the preliminary estimates are subject to higher uncertainties than usual, the reinsurer notes. They may have to be adjusted.
For the industry as a whole, Swiss Re estimates global insurance losses at $81 billion in 2018. This is the fourth highest value according to its own records. So 2018 will be an expensive year for the insurance industry. (awp/mm)
