Transatlantic loses $144 million in third quarter

Transatlantic Holdings, Inc. (NYSE: TRH) has reported a $144-million net loss for the third quarter of 2005, compared to a net loss of $21.8 million over the same quarter last year.
Third quarter 2005 results include the aggregate estimated pre-tax impact of significant catastrophe loss events amounting to $395 million or $256 million on an after-tax basis.
Such pre-tax costs for the third quarter include approximately $300 million related to Hurricane Katrina and approximately $50 million related to Hurricane Rita.
“This year’s results have been severely impacted by catastrophe losses related to several events, including Hurricane Katrina, the worst insured catastrophe loss in history,” Transatlantic president and CEO Robert F. Orlich said in a news release. “Despite such unprecedented losses, Transatlantic reported positive net income for the year to date period. In addition, operating cash flow and net investment income remains strong.
“The events of 2005 have prompted our industry to reassess catastrophe risk management practices. That process will likely bring about significant change in such practices as well as increased costs to purchase catastrophe-exposed coverages, consistent with the risk adjusted returns needed to adequately compensate for assuming such exposures.”
Orlich further noted that after the catastrophe events, “marine and property rates in affected regions have increased dramatically, while rates in many other areas have firmed. The longer term impact on market conditions is less clear as industry participants reevaluate risk assessment techniques, risk management strategies and risk appetite.”
For the third quarter of 2005, Transatlantic’s combined ratio was 144.2 versus 113.0 for the comparable 2004 quarter. The net impact of significant catastrophe loss events added 46.6 to the combined ratio for the third quarter of 2005, the company noted.