Hurricane losses mounting, industry reports

With additional information regarding claims and losses resulting from this years three major hurricanes flowing through the pipelines, many insurers and reinsurers are updating their loss forecasts associated to Hurricanes Katrina, Wilma and Rita.
Kiln P.L.C., which operates Lloyd’s of London syndicates 308, 510, 557 and 807, says
the pretax cost of the hurricanes may range from 60 million to 80 million (US$103.9 million and US$138.6 million).
The Company also gives an initial estimate related to losses incurred from Hurricane Wilma of between 7.5 million and 12.5 million (US$13.0 million and US$21.7 million).
Kiln say’s its initial estimates of Katrina losses are expected to increase by about 10 million (US$17.3 million) from the previous stated loss prediction of 30 million and 35 million (US$55.2 million and US$65.4 million).
Hurricane Rita, is estimated to have caused losses of between 7.5 million and 12.5 million (US$13.2 million and US$21.9 million) for Kiln.
Bermuda-based Catlin, which operates Lloyd’s syndicate 2003 as well as U.K.- and Bermuda-based insurance companies, reported a preliminary loss estimate of US$45 million, net of reinsurance, for Hurricane Wilma as well as an increased net loss estimate for Hurricane Katrina from US$125-$200 million.
Catlin expects that Rita net loss estimates will remain unchanged at US$60 million.
Reinsurers are also reviewing their financial results as effected by this years hurricane losses.
Max Re Capital Ltd. gave a preliminary estimate that indicates Hurricane Wilma will reduce its fourth-quarter earnings by about US$40 million.
Bermuda-based PartnerRe Ltd. is reporting an initial loss estimates from Hurricane Wilma, and increasing those from Katrina and Rita. The company also gave details of its revised financial plans for 2006.
The Company expects Katrina-related claims to reach US$525 million, while Rita will deliver a net claim figure of approximately US$85 million. Hurricane Wilma, which resulted in a general industry loss of approximately US$2 billion in Mexico and between US$10-$12 billion in Florida, will likely result in claims for PartnerRe of between US$190-$210 million with about 30% from Mexico.
These new cat loss estimates, including $67 million for flooding in Central Europe, total a $62 million increase from the reinsurers prior estimate of $615 million, which will reflect in the Company’s fourth quarter results.
“The reinsurance market remains competitive with substantial price increases only in those lines that were directly affected by the numerous catastrophes of 2005,” Patrick Thiele, president and ceo, says. “Certain lines and markets that were not affected by those major catastrophes, including Asia, portions of Europe and selected specialty lines, are increasingly competitive. In addition, many cedants continue to increase their net retentions and are moving from quota share to excess of loss coverages, reducing the amount of premium in the reinsurance marketplace. Nonetheless, this is an environment in which PartnerRe, with its broad diversification, financial strength, client relationships, technical skills, and multiple distribution channels, can be successful.”