September 30, 2008 by Canadian Underwriter
Bermuda insurers and (re)insurers could be bearing the brunt nearly half of the costs associated with recent storms, including Hurricane Ike, according to preliminary estimates, A.M. Best reports.
“According to the Association of Bermuda Insurers and Reinsurers, Bermuda insurers provide an estimated 66% of the reinsurance purchased by the Texas Windstorm Insurance Association, which insures most of the properties damaged by Ike in Texas,” A.M. Best writes. “The group estimates that Bermuda insurers will provide about 45% of the reinsurance claims that will eventually be paid to insurers for damage caused by Ike.”
Further to this, exposure to the US financial crisis is being reported by a number of Bermuda companies. The most significant loss is expected from the collapse of Lehman Bros and Fannie Mae and Freddie Mac, A.M. Best notes.
In terms of individual companies, Axis Capital has estimated Hurricane Ike will generate between US$285 million and U$385 million in losses.
Of this, the Axis reinsurance segment will pay US$220-279 million in losses, whereas its insurance segment will account for US$65-115 million, Axis reports in a release.
Hurricane Gustav will result in an estimated US$25-45 million net loss for Axis, the company reported. Of this, US$15-25 million will come from Axis’ reinsurance segment, while US$10-20 million will come from its insurance segment.
The total estimated loss of both hurricanes combined to US$310 million to US$430 million, net of reinstatement premiums, Axis notes.
Arch Capital Group expects losses between U$105-180 million from Gustav and Ike, while XL Capital’s estimates put its losses between $195 million and $270 million from both storms, A.M. Best reports.