Hannover Re’s Q1 cat loss budget eroded by Turkey quake and NZ weather: Althoff

Global reinsurance firm Hannover Re expects to utilise a significant amount of its catastrophe loss budget for the first-quarter of 2023 due to the claims from the earthquakes affecting Turkey and the flooding and weather affecting New Zealand.

This is according to Sven Althoff, Member of the Executive Board for Property & Casualty business at Hannover Re,who speaking this morning during a media call on the reinsurance firm’s full-year results, noted that these events will see the company leaning on its major loss budget again.

As we reported earlier this morning, Hannover Re went over its major loss budget in 2022, the sixth year in a row where the reinsurer has gone above this budgeted amount for the full-year.

Althoff revealed that 2023 has started with a relatively heavy loss burden again for the reinsurer.

“Let me say a few words about the natural disasters in the first quarter of 2023, especially the devastating earthquake in Turkey in Syria. We have followed the reports with dismay, and our sympathy goes to those affected,” Althoff said this morning.

Adding that, “It is still very early for reliable estimates of the full extent of the disaster, I would assume a net loss in the range of 200 million euros for us, as of today in the first quarter.

“This is based on an insured market loss estimates in the region of three to 3.5 to 4 billion euros.”

He went on to note that this was not the only significant catastrophe related event of the first-quarter for Hannover Re.

Explaining that, “Together with the severe tropical storm and the floods in New Zealand, the net losses from both events should result in a high utilisation of our major loss budget for the first quarter, which stands at 356 million euros.”

Althoff’s comments signal that Hannover Re is likely to come close to its Q1 major loss and catastrophe budget, once the quarter ends.

This suggests other major global players may also near, or even exhaust their natural catastrophe loss budgets for the period, with some other major players likely to take even bigger shares of the Turkey earthquake loss in particular, while there will also be some losses to come from the severe weather and winter storms affecting western US states, as well as the New Zealand events.