Losses from the extremely damaging and costly Los Angeles, California wildfires have eroded “a good portion” of the annual deductible of Bermuda-based Lancashire’s aggregate reinsurance cover, the company has revealed.
Last month, Lancashire announced estimated, aggregate net ultimate losses from the January 2025 wildfires in California of between $145 million and $165 million.
The firm explained at the time that this estimate is undiscounted, after anticipated recoveries from its outwards reinsurance programme and the impact of outwards and inwards reinstatement premiums.
At the January 1st, 2025, reinsurance renewals, Lancashire secured annual aggregate worldwide coverage for its property treaty and direct and facultative books.
The re/insurer explains that each qualifying event is subject to an occurrence layer with a per event deductible and limit, and as-if recoveries from that layer erode the annual aggregate deductible.
“Our California wildfire loss estimate erodes a good portion of the annual aggregate deductible, reducing it for
subsequent events,” reveals Lancashire.
Once the aggregate deductible has been fully eroded, additional losses are recovered from the annual aggregate reinsurance limit secured at 1.1 2025.
You can see from the image below, provided by Lancashire, that the California wildfire losses have eroded more than 50% of Lancashire’s annual aggregate deductible.
Lancashire provided this update on its aggregate reinsurance for 2025 alongside the release of its full year 2024 results, which were strong and included an 11% year on year rise in gross premiums written to $2.149 billion.
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