Zurich forecasts Hurricanes Helene, Milton impact below $360 million as catastrophe losses rise

4:35 am Thursday, November 07th, 2024

By Carolyn Cohn

LONDON (Reuters) -Zurich Insurance Group said on Thursday that its exposure to Hurricanes Helene and Milton, which recently wreaked havoc in the United States, would be less than $360 million, as insurers face increasing losses from natural catastrophes.

Analysts expect up to $55 billion in insured losses from the two major hurricanes. In addition to hurricane damage, insurers have seen a rise in losses from so-called “secondary perils” such as storms, hail, wildfires and floods in recent years, which they attribute partly to climate change.

“We need to shift the attention from just focusing on hurricanes to those secondary perils that are starting to have an ever increasing impact on financial results but also on society,” said Zurich Chief Financial Officer Claudia Cordioli.

Europe’s fifth-largest insurer said its third-quarter results included an estimated pre-tax loss for Hurricane Helene of $160 million. It expects preliminary fourth-quarter pre-tax losses due to Hurricane Milton to touch below $200 million.

Gross written premiums at Zurich’s property and casualty business rose 4% in the first nine months of 2024, due to increasing rates in its commercial insurance and retail segments. Rates rose 5%.

Insurance premiums have been rising in the past few years in response to inflation and to losses from the COVID-19 pandemic, wars and natural catastrophes.

Global commercial insurance rates fell 1% in the third quarter, the first quarterly decline in seven years, according to broker Marsh.

However, reinsurers, who insure the insurers, are no longer expecting prices to flatten at the key Jan. 1 renewal season due to recent disasters, Cordioli said on a media call.

Separately, Chief Executive Mario Greco said that Zurich has had no contact with Baloise and has no plans to make an offer for the Swiss insurer, denying a Bloomberg report on Wednesday that Zurich was among insurers considering a bid.

Zurich will present fresh three-year financial targets on Nov. 21, after the insurer reiterated on Thursday that it was on track to exceed all its current targets. Its shares rose 0.9%.

(Additional reporting by Bartosz Dabrowski; Editing by Rachel More, Sherry Jacob-Phillips and Alexander Smith)