Insurance Firms Count Catastrophe Costs

by Amanda Banks, Tax-News.com, London

06 July 2011

Natural disasters continue to impact on the Bermudan insurance industry, as "unprecedented" catastrophe losses mount up.

A series of Bermuda-based insurance firms have released their catastrophe loss estimates in recent days, focusing in particular on the severe weather seen in the US during April and May.

According to Arch Capital Group, its Q2 results will be negatively impacted by catastrophe events, resulting in total losses of USD90-110m, net of reinsurance and reinstatement premiums. Roughly 85% of this figure relates to Q2 events, with the remaining 15% relating to a re-estimation of Q1 losses.

For Montpellier, the US disasters will cause it a pretax loss of USD35m.

Flagstone is counting costs of USD25-30m, based on projected industry costs of USD15-20bn.

Hiscox, based on an estimated industry loss of USD15-25bn, expects losses of GBP35m.

Commenting on the losses recorded this year, David Brown, CEO of Flagstone said: "Though only at its midpoint, 2011 is already one of the most unprecedented years for significant global catastrophes the industry has ever seen".

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