Zurich estimates aggregate claims of $700 million in Sandy’s wake

Zurich Insurance Group announced Monday its current estimates for Superstorm Sandy are aggregate claims net of reinsurance of about US$700 million and reinstatement premiums due on reinsurance covers of approximately US$58 million.

The former figure includes US$40 million related to reinsurance cover provided to the Farmers Exchanges, managed but not owned by a wholly owned subsidiary of Zurich, notes a statement from the company. All figures are pre-tax estimates that will be recorded in the company’s 2012 Q4 results.

“This storm has shown us once again how powerful natural forces can be and what risks they pose,” says Martin Senn, CEO of Zurich.

The storm resulted in widespread loss of power, flooding, wind-related damage and disruptions of public transport.

Zurich sent pre-event emails and tips to 1,800 select brokers before the storm made landfall in the United States on Oct. 29. The company reports that within five business days of notice of loss, its catastrophe team made initial contact with all customers, it issued its first claims payments on Nov. 5, and all inspections of the locations with a reported large loss were completed by mid-November.

Zurich’s loss estimates follow those released by a number of other insurers.

New York-based American International Group, Inc. (AIG ) recently announced its preliminary estimate of after-tax losses, net of reinsurance, is about US$1.3 billion. The estimate reflects a pre-tax loss estimate, net of reinsurance, totalling approximately $2.0 billion, notes a statement from the company.

“AIG expects to make a capital contribution to its U.S. property casualty insurance subsidiaries of $1 billion from existing, readily available funds,” the statement says. Storm-related losses “will be reflected in AIG’s fourth quarter 2012 results, and any subsequent changes will be recorded in the period in which they occur.”

Specialist insurance market Lloyd’s announced Wednesday that its estimated net claims before tax from Sandy are between $2 billion and $2.5 billion.

“The Lloyd’s insurance market remains financially strong and, while claims from this storm could still evolve over time, the market’s total exposure is well within the worst-case scenarios we model and prepare for,” Richard Ward, chief executive for Lloyd’s, says in a statement.

Other Sandy-related loss estimates include the following: Swiss Re – about US$900 million, net of retrocession and before tax; The Travelers Companies, Inc. – approximately $650 million after tax and after estimated recoveries from reinsurance; The Chubb Corp. – $570 million after tax, including estimated losses and loss expenses net of reinsurance recoverable, as well as estimated reinsurance reinstatement premiums: ACE Ltd. – $380 million after tax, net of reinsurance and including reinstatement premiums (for losses attributable to Sandy in the northeastern U.S.); The Hartford – $350 million for losses and loss adjustment expenses net of reinsurance.

In Canada, a preliminary estimate from Property Claim Services Canada pegs related insured property damage in this country at $100 million.