By Henry Gale

Feb 27 - (The Insurer) - Most of the reports Swiss Re has received from primary insurers about the Palisades and Eaton fires treat them as a single event, the reinsurer's CFO John Dacey told a media call on Thursday.

"In some cases, the contract wording is very clear," Dacey said. "Most of the reinsurance policies have an accumulation of events that occur within seven days, 168 hours."

Much of the destruction from both fires occurred within three days, between January 7 and 9, Dacey said. "And in that context, most of the reporting to us from our primary companies has been a one-event reporting.

"I think there's at least one client which might have split this, because they have the ability to with the reinsurance contract, as two events," Dacey continued. "But generally speaking, we don't believe that there's much residual risk to Swiss Re about the way that these claims are presented as one or multiple events."

Some insurers' reinsurance recoveries could vary depending on whether they treat the Los Angeles wildfires as one or two events. For example, Mercury General said earlier this month that loss aggregator Property Claim Services' decision to treat the events separately allowed it to classify the fires as two events for the purpose of its reinsurance if it chose.

Alongside its 2024 results, Swiss Re disclosed that it expected its losses from the wildfires to be less than $700 million. This figure is net of retrocession recoveries and reinstatement premiums cedants could pay to continue their coverage, Dacey said.

"It does not include a hypothetical or potential benefit of subrogation, if in fact it's found that the cause of these fires in particular is identifiable and can be placed with someone outside the insurance industry," he added.

The estimate is based on total industry losses of $40 billion from the wildfires. Dacey indicated that if the total loss rises higher than that, Swiss Re could have a larger share.