{"id":22323,"date":"2025-01-11T06:16:43","date_gmt":"2025-01-11T06:16:43","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/insurance\/mercury-says-la-wildfire-losses-to-exceed-reinsurance-retention\/"},"modified":"2025-01-11T06:16:43","modified_gmt":"2025-01-11T06:16:43","slug":"mercury-says-la-wildfire-losses-to-exceed-reinsurance-retention","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=22323","title":{"rendered":"Mercury says LA wildfire losses to exceed reinsurance retention"},"content":{"rendered":"


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Insurer Mercury General Corporation has said that it expects the ongoing wildfires in Los Angeles, California will result in losses for the company that will exceed its reinsurance retention of $150 million.

\"mercury-insurance-logo\"It will be some time until Mercury has an estimate for its ultimate losses from the ongoing wildfire event, the company said today.<\/p>\n

But, \u201cBased on information available to date, we expect the losses to exceed our reinsurance retention level of $150 million,\u201d the insurer said.<\/p>\n

Mercury said that its reinsurance program provides for $1.29 billion of coverage limits on a per-occurrence basis after covered catastrophe losses exceed that retention level.<\/p>\n

The reinsurance program also covers any assessments from the California FAIR plan and Mercury said that, if losses end up being reinsured, the program calls for reinstatements of limits to cover future loss events.<\/p>\n

Should the full $1.29 billion of reinsurance limits be utilised, then the total reinstatement premium payable by Mercury would be $101 million, the insurer explained.<\/p>\n

Recall that Mercury has been a beneficiary to a number of the Randolph Re series <\/a>of private catastrophe bonds.<\/p>\n

The latest of these, issued in July 2024, was a $45.5 million privately placed transaction<\/a>, that provides Mercury collateralized reinsurance against wildfire losses in California, we understand.<\/p>\n

We do not know what level that private cat bond sits at in Mercury\u2019s reinsurance tower, so it\u2019s impossible to tell at this stage whether it could face risk of being triggered.<\/p>\n

But it is a rare per-occurrence California wildfire only catastrophe bond, so will likely be an arrangement considered at some risk, until Mercury\u2019s ultimate net losses from these fires becomes clearer.<\/p>\n

Also read:<\/strong><\/p>\n

\u2013 LA fires: \u201cConsiderable attachment erosion\u201d likely for some aggregate cat bonds \u2013 Steiger, Icosa<\/a>.<\/p>\n

\u2013 LA wildfires: Over 10k structures destroyed. Insured losses up to ~$20bn, economic $150bn<\/a>.<\/p>\n

\u2013 LA wildfire losses unlikely to significantly affect cat bond market: Twelve Capital<\/a>.<\/p>\n

\u2013 LA wildfires unlikely to cause meaningful catastrophe bond impact: Plenum Investments<\/a>.<\/p>\n

\u2013 JP Morgan analysts double LA wildfire insurance loss estimate to ~$20bn<\/a>.<\/p>\n

\u2013 LA wildfires: Analysts put insured losses in $6bn \u2013 $13bn range. Economic loss said $52bn+<\/a>.<\/p>\n

\u2013 LA wildfires bring aggregate cat bond attachment erosion into focus: Icosa Investments<\/a>.<\/p>\n

\"Print<\/a><\/div>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

Insurer Mercury General Corporation has said that it expects the ongoing wildfires in Los Angeles, California will result in losses for the company that will exceed its reinsurance retention of $150 million.It will be some time until Mercury has an estimate for its ultimate losses from the ongoing wildfire event, the company said today. But, […]<\/p>\n","protected":false},"author":1,"featured_media":22324,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[94],"tags":[14956,14957,14958,14961,11034,14959,11174,14960,11116,14962,8063],"dealstore":[],"offerexpiration":[],"class_list":["post-22323","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-insurance","tag-cat-bond","tag-catastrophe-bond","tag-catastrophe-losses","tag-exceed","tag-insurance","tag-insurance-linked-securities","tag-losses","tag-mercury","tag-reinsurance","tag-retention","tag-wildfire"],"yoast_head":"\nMercury says LA wildfire losses to exceed reinsurance retention - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=22323\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mercury says LA wildfire losses to exceed reinsurance retention - Som2ny Network\" \/>\n<meta property=\"og:description\" content=\"Insurer Mercury General Corporation has said that it expects the ongoing wildfires in Los Angeles, California will result in losses for the company that will exceed its reinsurance retention of $150 million.It will be some time until Mercury has an estimate for its ultimate losses from the ongoing wildfire event, the company said today. 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