Travelers cat losses slow, but aggregate reinsurance still on-watch

Travelers cat losses slow, but aggregate reinsurance still on-watch

United States main insurer Travelers has actually reported lower catastrophe losses for the second-quarter of 2021, however its year-to-date run-rate continues to outpace the previous year, as its aggregate net catastrophe losses have reached above $1.3 billion by the middle of this year.As we explained back in April, following an especially expensive first-quarter of disaster losses in Q1, thanks to US winter season storms, freezing weather and severe weather, Travelers had already eroded almost half the deductible sitting under its aggregate catastrophe reinsurance.
Travelers 2021 aggregate reinsurance treaty covers qualifying losses from PCS-designated catastrophe events in North America in excess of $5 million per disaster event, as much as an optimum of $250 million per-event, with the attachment for the protection sitting at $1.9 billion.
We previously reported that Travelers upsized on its aggregate catastrophe reinsurance security for 2021, with the renewed treaty set to cover 70% of a $500 million layer, so $350 countless coverage and a $150 million retention.
By the end of Q1 Travelers had collected some $915 million of qualifying losses towards the aggregate retention of its reinsurance.
The run-rate has slowed considerably, with Q2 a far more benign period for catastrophe events.
But Travelers has actually still reported today a further $475 million of pre-tax catastrophe losses web of reinsurance, taking its pre-tax and internet of reinsurance toll to $1.31 billion for the half-year. Thats well down on the $854 million reported for the prior year quarter.
Those are the net figures and the gross tends to be some roughly 8% to as much as 15% greater than the reported figures in its accounts, a cursory look through recent reports shows, indicating the actual gross run-rate could be closer to $1.4 billion to $1.45 billion (estimated by us), although it does depend upon how much of the Q2 losses really qualified as PCS designated feline occasions.
With the aggregate reinsurance treaty kicking in at $1.9 billion of losses and half the year delegated run, including the cyclone season, Travelers remains well on-track to gain from its aggregate reinsurance once again in 2021, despite the fact that Q2 has actually been more benign.
The company might be as much as 70% to three-quarters of the way to its aggregate reinsurance attachment point already, it appears.
The run-rate, year-to-date, remains ahead of 2020, as by the middle of the year Travelers had only reported $1.187 billion of net and after reinsurance disaster losses.
All of this implies Travelers aggregate reinsurance remains a layer of coverage to view as the year progresses, as even a typical run of disasters through the remainder of the year need to have a likelihood to activating it.

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