By Rebecca Delaney

Feb 13 - (The Insurer) - Lancashire Holdings has revealed that it expects aggregate net ultimate losses of between $145mn and $165mn in relation to the recent Southern California wildfires.

In an update on Wednesday morning, Lancashire confirmed that the loss estimate falls within its modelled loss range for this type of catastrophe event.

The preliminary estimate is undiscounted, after anticipated recoveries from Lancashire’s outwards reinsurance program and the impact of outwards and inwards reinstatement premiums.

It is based on a combination of market data and assumptions with modelled loss projections, as well as a "limited" amount of provisional loss advices and client loss data.

Lancashire group CEO Alex Maloney said: “Given our strong earnings performance and capital generation in 2024 Lancashire remains extremely well capitalised to achieve its strategic ambitions. In addition, the aggregate reinsurance cover the company has in place to protect against the frequency of large catastrophe events should allow Lancashire to deliver an attractive return for shareholders in 2025.”

Maloney added that Lancashire will provide a further update on the losses, as well as guidance for 2025, as part of its full-year results announcement on 6 March.

“Events like this show the value of (re)insurance products in both offering protection and in supporting people as they rebuild their lives,” he continued.

Lancashire is the latest carrier to reveal a loss estimate for the wildfires that spread across Los Angeles last month, with the Bermuda-based company currently in the lower range of disclosed loss estimates.

Earlier this week, AIG said it currently estimates a net loss of $500mn from the wildfires, matching the attachment point on its catastrophe program. Elsewhere, Cincinnati Financial estimated Q1 2025 pre-tax cat losses from the wildfires of $450mn to $525mn, net of reinsurance recoveries.

Similarly, Arch Capital Group has estimated it will take a $450mn to $550mn hit, with CNA Financial also towards the lower end of disclosed loss ranges, with the Doug Worman-led carrier expecting up to $70mn in net losses.