Fairfax says Katrina losses reach $388 million

Fairfax Financial Holdings Ltd. has updated its predicted net Hurricane Katrina pre-tax losses to $388 million and post-tax losses to $233 million.
The company said the new estimate reflects new information received and an expected aggregate industry loss estimate of approximately $50 billion. Fairfax’s initial post-tax loss estimate of between $108 million and $104 million was based on a projected aggregate industry loss estimate of $30 billion, the company said in a press release.
OdysseyRe Holdings Corp., a reinsurer owned by Fairfax, stands to lose $117 million of the estimated $233 million figure.
Fairfax announced Odyssey Re has agreed to sell 4.1 million shares of its common stock at $24.96 per share, for a total share offering valued at approximately $102.3 million. Fairfax plans to purchase 3.1 million of OdysseyRe’s 4.1 million shares to maintain its current ownership interest in OdysseyRe.
Fairfax also announced that during its third quarter, certain of the company’s US subsidiaries sold an aggregate of $30 million of Zenith National Insurance Corp. (NYSE:ZNT) convertible debentures and 2.1 million shares of Zenith common stock, “resulting in a pre-tax realized gain of approximately $131 million.”
Fairfax continues to hold approximately 2.56 million shares, or approximately 11% of Zenith common stock, on a fully diluted basis.
Fairfax has announced the following after-tax losses due to Hurricanes Katrina and Rita:
OdysseyRe — $117 million (Katrina); $26 million (Rita)
Crum & Forster — $31 million (Katrina); $8 million (Rita)
Group Re — $74 million (Katrina); $4 million (Rita)
Northbridge — $11 million (Katrina); $4 million (Rita)