Euler ILS Partners, the specialist insurance-linked securities (ILS) investment manager, has issued an updated event report for the California wildfires, saying it believes the insurance industry loss may sit between $23 billion to $33 billion.In January, the investment manager released its first event report from the wildfires, so this has now seen a sharp increase since then.and the first estimates of insurance industry losses from catastrophe risk modellers, so far have a mid-point of $31.125 billion.While Verisk pegged insured losses from the wildfires at between $28 billion and $35 billion, and as RenRe based its estimate on a $50 billion industry loss event, while Chubb also seems to be working from a relatively high industry figure, too.

“We currently estimate the insured losses for relevant property and automobile insurance to be between USD 23 billion to USD 33 billion.This estimated range has been calculated using the number of policies affected and insured values in the region as well as detailed policy features for homeowner and commercial policies,” Euler ILS Partners noted.In addition to the firm’s loss estimate, analysts also highlighted that there can be further losses which are typically not subject business to the sectors covered in the catastrophe bond or ILS market, such as marine, art, and other lines of business.

Analysts also noted that so far they have received insured loss estimates from insurers which make up roughly 40% of the insurance market in Southern California.Euler ILS Partners explained that using those estimates and grossing them up to 100% would provide an estimated $27.5 billion total market loss which is in good agreement with the investment manager’s midpoint market loss estimate of $28 billion.“Hence, both approaches – the detailed policy terms and number of affected buildings and cars as well as aggregating and grossing up for 100% market share – lead to very similar insured loss figures, which makes us confidence of the robustness of the estimates,” the ILS investment manager explained.

Concluding: “Of the estimated USD 28 billion market loss we estimate using reinsurance structures that about USD 7 billion will be in the retentions of insurers and the remaining part will need to be absorbed by reinsurers and maybe ultimately USD 1 billion to USD 2 billion by the ILS market.” ..All of our Artemis Live insurance-linked securities (ILS), catastrophe bonds and reinsurance can be accessed online.Our can be subscribed to using the typical podcast services providers, including Apple, Google, Spotify and more.