ACE, AIG each release loss estimates related to Hurricane Sandy

ACE Ltd. and American International Group Inc. have released preliminary estimates of losses due to severe weather resulting from Hurricane Sandy.

Preliminary losses in the fourth quarter of 2012 for the Zurich-based ACE Group of companies are estimated at US$380 million after tax, net of reinsurance and including reinstatement premiums, the firm stated in a press release Monday. That figure is for losses attributable to “Superstorm Sandy” in the northeastern U.S.

“This estimate includes losses generated from the company’s commercial and personal property and casualty insurance businesses as well as its reinsurance operations,” the firm stated in a press release. “Due to the size and complexity of the storm and related losses, the estimate is subject to change.”

On Friday, AIG announced its preliminary estimate of after-tax losses related to the storm, net of reinsurance, will be about US$1.3 billion.

New York City-based AIG added its pre-tax loss estimate, net of reinsurance, will be about US$2 billion.

“This preliminary estimate involves the exercise of considerable judgment,” AIG stated. “Due to the complexity of factors contributing to the losses, there can be no assurance that AIG’s ultimate losses associated with this storm will not differ from this estimate, perhaps materially.”

Hurricane Sandy was downgraded to post-tropical storm status when it made landfall in New Jersey Oct. 29, causing major damage, including flooding of the New York City subway system. When the storm moved into Ontario, strong winds caused multiple power failures and a woman was killed in west Toronto when a store sign fell on her. In a Nov. 28 press release, the Insurance Bureau of Canada (IBC) attributed two deaths in Canada to the storm.

In a revised estimate released in November, EQECAT Inc. forecast that insured losses would be US$10 billion to US$20 billion, with total economic damages of between US$30 billion and US$50 billion. 

Swiss Re reported last month it estimated claims from Hurricane Sandy will be about US$900 million, net of retrocession and before tax, and it estimated total insured losses of US$20 billion and $US25 billion.

Also in November, IBC released a preliminary estimate from Property Claim Services Canada of $100 million in insured property damage in Canada related to the storm. At the time, IBC said thousands of claims had been filed for damage to homes, cars and businesses after the storm.