In addition, large man-made catastrophe events are expected to lead to a pre-tax claims burden of approximately USD 300 million
While the third quarter losses are large for an individual quarter for Swiss Re, the cumulative losses for the first nine months are broadly in line with year-to-date expectations
Swiss Re estimates its preliminary claims burden from recent natural catastrophes amount to approximately USD 1.1 billion in the third quarter of 2018, net of retrocession and before tax. Claims from Typhoon Jebi are expected to be USD 500 million. The claims burden from Hurricane Florence is expected to be USD 120 million. A number of further natural catastrophes, mainly in Japan (including torrential rains/floods, Typhoon Trami) and North America (such as the Carr Wildfire in California and a windstorm in Ontario) aggregate to another USD 500 million of large losses for Swiss Re in the quarter. In addition, multiple large man-made disasters are expected to generate approximately USD 300 million in claims for the third quarter, the impact of which is expected to be almost equally distributed between the Reinsurance and Corporate Solutions business units.
Typhoon Jebi was the strongest typhoon to strike Japan since Typhoon Yancy in 1993. It made landfall over Shikoku and, on 4 September 2018, over the Kansai region of Japan as a category 5 typhoon. At least 11 deaths and more than 600 injuries were reported across the region. Kansai International Airport, one of the most important transport hubs in Japan, was closed due to flooding. According to Swiss Re estimates, total insured market losses for Typhoon Jebi are expected to be at approximately USD 6 billion. Swiss Re is a leading reinsurer in the Japanese market and expects to incur USD 500 million of reinsurance claims for Typhoon Jebi.
Hurricane Florence made landfall in North Carolina on 14 September 2018. It caused high coastal storm surges across North and South Carolina and torrential rains in the days that followed. Significant inland flooding continued as the storm dissipated, causing damage from floods and high water. Swiss Re estimates total insured market losses for Hurricane Florence in the region of USD 4 billion, of which its own claims burden is expected to be USD 120 million. This will impact both the Reinsurance and Corporate Solutions business units.
Swiss Re's Group Chief Underwriting Officer, Edouard Schmid, says: "We extend our deepest sympathies to those who have been affected by these catastrophes. We are working very closely with our clients and partners to help rebuild as quickly as possible. With our strong capital position and high financial flexibility, we are able to react fast when our clients need us most. We also want to stress our continued commitment to providing capacity in Japan, where we demonstrated our steadfast support following the earthquake off the coast of Honshu in 2011."
The third quarter showed a significant increase in man-made losses in industrial business lines. Multiple large man-made disasters which either occurred or deteriorated in the third quarter of 2018 – including, among others, the collapse of the Genoa motorway bridge in Italy, a shipyard fire in Germany and the Ituango dam flooding in Colombia – are expected to lead to approximately USD 300 million in claims. This claims burden is expected to equally impact the Group's Reinsurance and Corporate Solutions business units.
While the third quarter losses are large for an individual quarter for Swiss Re, the cumulative losses for the first nine months are broadly in line with year-to-date expectations. Swiss Re will publish its nine months 2018 key financial data on 1 November 2018.
The foregoing estimates are subject to a higher than usual degree of uncertainty and may need to be subsequently adjusted as the claims process continues.
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