Arch Announces Catastrophe Loss Estimates
Bermuda-based Arch Capital Group has established a range of pretax catastrophe losses of $190 million to $210 million in the 2020 third quarter.
The company said, “Arch Capital Group Ltd. reports that its 2020 third quarter results will be negatively impacted by a set of catastrophe events that occurred during the third quarter, including Hurricanes Isaias, Laura, and Sally, the Derecho Windstorm, California Wildfires and other minor global events.
“As a result, the Company has established a range of pretax catastrophe losses of $190 million to $210 million in the 2020 third quarter across its property casualty insurance and reinsurance segments, net of reinsurance recoveries and reinstatement premiums.
“Included in these estimates is a range of estimates of $10 million to $15 million for ongoing exposure to COVID-19 global pandemic claims. For clarity, the estimates specific to the global pandemic are in addition to the $260 million estimate previously disclosed by the Company in its Quarterly Report on Form 10-Q for the six months ended June 30, 2020.
“The ranges of estimates above are for the Company’s insurance and reinsurance segments only. The Company will report on the mortgage segment results when it releases 2020 third quarter results, which is currently scheduled for Oct. 29 after markets close.
“At this time, there are significant uncertainties surrounding the ultimate number of claims and scope of damage resulting from these events. The Company’s estimates across its insurance and reinsurance segments are based on currently available information derived from modeling techniques, including preliminary claims information obtained from the Company’s clients and brokers, a review of relevant in-force contracts and estimates of reinsurance recoverables.
“These estimates include losses only related to claims incurred as of Sept. 30, 2020. Actual losses from these events may vary materially from the estimates due to several factors, including the inherent uncertainties in making such determinations. The loss estimates exclude the operations of Watford Holdings Ltd. [Watford]. Pursuant to GAAP, the Company consolidates the results of Watford in its financial statements, although it only owns approximately 13% of Watford’s outstanding common equity.”
