The Fairfax Financial subsidiary is understood to have written a $25mn share of the tower for the Californian utility company, which has been affected by the fallout from the devastating wildfires in the state for a second consecutive year.
Sources said Crum & Forster had a casualty excess of loss treaty of $20mn xs $5mn and was expected to retain $5mn of its $25mn line, passing the rest to its reinsurers.
Crum & Forster did not participate on the 2017-2018 loss struck tower which has also handed significant losses to reinsurers that wrote its approximately $800mn of limit.
The insurer is believed to have come on to the restructured cover for the 2018-2019 contract for the first time, a renewal that included significant rate increases for underwriters.
It is not clear where on the tower the carrier’s $25mn line attached, although sources said it was likelier to be on the $700mn general liability segment of the cover rather than the $700mn third party property protection.
The loss came to light ahead of the 15 December renewal of Crum & Forster’s casualty treaty.
Both stretches of the PG&E cover are widely expected to be total losses for insurers.
PG&E is facing lawsuits and subrogation claims from property insurers after the company confirmed it was being investigated by state authorities in relation to the Camp Fire.
Under California’s Inverse Condemnation laws, utility companies are liable for all damage if responsible regardless of negligence.
As previously reported, there were significant changes among insurers participating on the structured PG&E cover when it was placed at 1 August this year.
AIG and Chubb look to have avoided exposure to wildfire losses after coming off the general liability tower despite the improved pricing on offer.
Bermuda’s OIL Casualty Insurance Ltd, Argo and Axis joined the two insurance giants in coming off the general liability cover at the renewal.
Lead Aegis Mutual and Energy Insurance Mutual continued to participate on the core layers at the bottom of the structure.
Other markets including Munich Re, Berkshire Hathaway, Allied World and Swiss Re also featured on the latest cover.
The third party property segment of the tower included a $200mn catastrophe bond, Cal Phoenix Re.
PG&E paid a rich price for the overall $1.4bn of limit purchased at renewal.