Exposure to catastrophe events puts insurer AmTrust at risk

Analysts have highlighted concerns over property and casualty insurer, AmTrust Financial, as it is exposed to both natural and man-made catastrophe events, of which there have been an unusual number of late, such as the hurricanes Harvey, Irma and Maria. Indeed, Fitch rating agency say that 2017 will be one of the costliest catastrophe years ever on record. Furthermore, AmTrust has been hit by rising expenses mainly because of higher losses and loss adjustment expenses, interest expenses, acquisition and other underwriting expenses, which will end up restricting its operating margin expansion, hampering results and limiting growth.

October's wildfires in northern California will be the costliest ever in the U.S., Fitch Ratings reports. (Photo: AP Photo/Jeff Chiu)

The October wildfires that devastated northern California’s Napa and Sonoma counties are expected to be the costliest wildfire loss in U.S. history, according to Aon Benfield. The latest insured loss estimate is $8 billion, and the overall economic losses are expected to be considerably greater. The impact on insurance company ratings may not be as severe, however.

A new report from Fitch Ratings says that, based on recent assessments, no U.S. reinsurance companies in its rated universe are expected to be downgraded as a result of losses from the California wildfires alone.