Everest Re, Axis Capital and Arch Capital report Q3 results hit by hurricane Ian

Exposure to hurricane Ian has driven Everest Re and Axis Capital to third-quarter losses while a third Bermudan reinsurer, Arch Capital, reported a 98% drop in net income for the period. Everest Re closed Q3 2022 with a net loss of $319m from a loss of $73m for Q3 2021, after booking catastrophe losses totalling $730m for this year’s third quarter. The reinsurer was hit by hurricane Ian as well as European hailstorms, hurricane Fiona in Canada and typhoon Nanmadol. Everest Re’s president and CEO Juan Andrade said Everest Re was spared more serious losses to one of the industry’s largest US hurricane claims by its diversification strategy and underwriting discipline. He added that the reinsurer is set to recover: “With our well-defined strategy, we’re poised to take advantage of the hardening market, focused on segments with the best risk-adjusted returns.” Everest Re closed the quarter with a combined ratio of 112%, including 27.4 points of catastrophe losses and recorded a combined ratio of 98% for the first nine months of 2022. Everest Re said net income for the year to date remains in the black at $101m, compared with $948m at the same stage last year, while underwriting income for the first nine months totals $109m, after booking a loss of $367m in Q3 2022. “Despite the challenging macroeconomic environment, both underwriting businesses delivered sub-90 attritional combined ratios and we continue to make an underwriting, operating and net income profit on a year-to-date basis,” Andrade said. Catastrophe losses totalling $212m for Axis Capital saw it end the quarter with a net loss of $17m, compared to net income of $47m recorded for Q3 2021. For the nine months to end of September 2022, Axis reported net income of $152m, after catastrophe losses of $339m. Albert Benchimol, president and CEO of AXIS Capital, said its strategy has paid off: “For AXIS, the third quarter provides further validation of our strategic evolution to focus our portfolio on specialty, as well as reduce our exposure to catastrophes.” He added: “For the year to date, our industry has suffered in excess of $100bn of catastrophe losses, yet AXIS grew underwriting income by 75% and operating income by 30%. Arch Capital reported a 98% fall in net income in Q3 2022 to $6.9m, from $388.8m last year, after booking catastrophe losses worth $550.8m, primarily from hurricane Ian as well as US convective storms, typhoon Nanmadol and hailstorms in France in June. Underwriting income at Arch was down 60% to $68.8m, to record a combined ratio of 97.3% for Q3 2022, from 91.4% last year. Its insurance business recorded a $33.7m underwriting loss for Q3 2022, while its reinsurance account reported an underwriting loss of $196.9m, from $38.9m last year. Third-quarter results from the trio also revealed a 6.3% increase in gross written premiums for Everest Re to $3.7bn, after double-digit increases in insurance. Arch Capital recorded a 20% increase in gross premiums to $3.9bn after it recorded increases in most lines of business, which it said was in part due to rate increases but also new business opportunities. Arch’s reinsurance segment recorded 31% growth in gross premiums for the third quarter. Axis Capital reported a 5% increase in gross premiums during the quarter to $6.5bn, after a 9% drop in its reinsurance premiums was offset by a 16% increase in insurance business.

Everest Re, Axis Capital and Arch Capital report Q3 results hit by hurricane Ian

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