This story was originally posted by Advisor’s sister magazine, CI Top Broker.
Economical Insurance says its initial estimate of its pre-tax loss over the Fort McMurray wildfire is $35 million to $45 million, net of reinsurance recoveries and reinstatement premiums.
The company said in a formal announcement that its catastrophe reinsurance coverage will kick in once losses reach $30 million. “We will record the loss related to this catastrophe in our second quarter results.”
The initial estimate is based mostly on claims put in so far, known exposures in the area, and reported percentage losses in various parts of the community. Given that there’s still no direct access to the disaster site, the company points out that “losses within an area can vary from one street to the next and the fire is still ongoing. It also assumes that this wildfire does not return to Fort McMurray. Consequently, the ultimate loss we incur may differ from our initial estimate.”
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