AXA ups terrorist attack loss estimate to $550 million

As insurance companies continue to increase their estimates of loss as a result of the terrorist attacks on U.S. targets on September 11, AXA is among the companies reassesing its exposure. The insurer has upped its estimate to US$550 million pretax loss, from last week’s prediction of US$300-$400 million. The company’s gross exposure is US$1 billion, before reinsurance considerations. In devising the US$550 million figure, the company reports that US$150 million is split evenly among life, property and casualty, and aviation exposures. The remaining US$400 million is reinsurance exposure.
Also increasing their preliminary loss estimates is Bermuda’s ACE Limited, which is reporting a US$550 million reduction in third quarter net operating income after tax as a result of the tragedy. The increase, the company says, is “almost entirely related to reinsurance claims ceded to ACE from companies reinsured by ACE.
German insurer Allianz AG has reassesed its loss at US$928 million.
Consulting firm Tillinghast-Towers Perrin is now saying it predicts losses from the terrorist attacks on the World Trade Center and the Pentagon will cost insurers between US$30 billion and US$58 billion. And rating agency A.M. Best reports that equity analysts are predicting big rate hikes in light of the catastrophe.
Late last week several insurance company leaders met with U.S. president George W. Bush to discuss the impact of the terrorist attacks on the industry and its ability to pay claims to policyholders.