By Scott Vincent

Feb 11 - (The Insurer) - Travelers has estimated its pre-tax net exposure to January’s California wildfires at $1.7bn.

The estimate, which reduces to $1.3bn after tax, includes losses reported through the group’s personal and commercial segments, as well as its Fidelis quota share and estimated assessments from the California FAIR Plan.

The estimate is also net of expected recoveries from reinsurance.

Travelers had previously disclosed that it expected the wildfires to have a “material impact” on its Q1 earnings. Travelers’ corporate cat XoL reinsurance treaty for 2025 has a $4bn retention and is thus unlikely to have been triggered by the event. However, the carrier has a number of other cat reinsurance agreements in place.

Travelers is one of several carriers to have disclosed preliminary guidance around expected losses from the wildfires, which are expected to become the costliest event on record for the peril.

Chubb has estimated its net losses at $1.5bn, with Allstate expecting a net loss of around $1.1bn after reinsurance recoveries of around $900mn.

Following yesterday’s market close Arch Capital said it expects losses of $450mn to $500mn from the wildfires. European reinsurer Hannover Re said it expects to report losses of €500mn to €700mn ($518mn-$725mn) in relation to the events.

Publicly available modelled loss estimates from the event range from $20bn to $45bn.

Moody’s RMS has estimated the wildfires will be a $20bn-$30bn industry loss event, with Verisk providing a $28bn-$35bn range.

Karen Clark & Company has estimated industry losses at $28bn, with CoreLogic suggesting losses will fall in the $35bn to $45bn range.