Wildfire
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Fitch said 1Q wildfire losses could add 6% to 10% to Mercury’s CoR. -
The total includes fire and smoke damage plus living expenses for evacuees.
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The fire started Wednesday morning and is currently 0% contained.
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The carrier’s Milton loss came in below expectations, but its fire claims will be “material” in Q1.
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Losses from the larger fire will amount to $20bn-$25bn, the modeller said.
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Two 2021 worldwide aggregate ILW notes are also among the markdowns.
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The carrier has received more than 3,600 claims from LA wildfires.
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There are many unknown factors including insurance gaps, high-value property and damage to critical infrastructure.
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The anticipated portion ceded to reinsurance may reach the mid-to-high single-digit billions, it added.
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This will be the most expensive fire in the state’s history, it said.
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A $30bn industry loss would use one-third of Big Four’s 2025 cat budgets.
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ILS managers expect the losses to have some impact on future cat bond spreads.
