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AnalysisInsuranceThe WrapThe Float

Pelagos war-risk estimate reaches $4 billion

The Bermuda reinsurer's large losses doubled to $115.9 million while the combined ratio held at 91.5%.

At a glance

  1. Catastrophe and large losses doubled to $115.9 million but remained inside the 100% combined ratio threshold at which a book underwrites at a profit.
  2. The $4 billion scenario is 1.6 times the premium base, so a single severe political violence loss could consume more than an entire year's premium at the top of the estimate range.
  3. For reinsurance buyers and ILS allocators reviewing Pelagos capacity, the 1.6-times concentration on a single scenario is the figure renewal negotiations will test.

Pelagos' war-risk estimate runs as high as $4 billion against a $2.5 billion premium base, while the Bermuda reinsurer posted a 91.5% combined ratio.

Catastrophe and large losses doubled to $115.9 million but remained inside the 100% combined ratio threshold at which a book underwrites at a profit.

The $4 billion scenario is 1.6 times the premium base, so a single severe political violence loss could consume more than an entire year's premium at the top of the estimate range.

For reinsurance buyers and ILS allocators reviewing Pelagos capacity, the 1.6-times concentration on a single scenario is the figure renewal negotiations will test.

The worst case is 1.6 times the premium base

Top of Pelagos' war-risk estimate range against its annual premium base, $B

War-risk estimate (top)

$4.0B

Premium base

$2.5B

At the top of the range, one severe political-violence loss would exceed a full year's premium.

Source: Pelagos war-risk estimate and premium base, as reported

Reported by The Wrap desk from Pelagos results statement. Published . Corrections

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Pelagos war-risk estimate reaches $4 billion