Bermuda-based PartnerRe Ltd. has issued a bulletin providing an update on the catastrophic events of the third quarter, and the potential impact on the Company’s shareholders’ equity. The bulletin did not give any specific loss estimates.
The reinsurer indicated that “the loss adjustment process” from Hurricane Katrina “will take several months due to the protracted recovery period and complex coverage issues.” PartnerRe said it “currently estimates that the total industry insured loss will be in the range of $30-35 billion.” It also noted that there have been “several other industry large loss events in the quarter, including five aviation losses, Atlantic hurricanes Dennis and Emily, two typhoons in Japan and China, and flooding in India and Central Europe.”
The impact on PartnerRe’s shareholders equity from the loss events will be a decline in shareholder equity value. The announcement noted that the estimates were based on its “analyses and modeling for these events to date. Total shareholders’ equity at September 30, 2005 should decline no more than 10 percent from the $3.482 billion reported at June 30, 2005, assuming no other large loss events and no significant movement in credit and equity markets for the remainder of the quarter. The Company expects to provide additional updates in early October.”
President & CEO Patrick Thiele noted: “We believe that Katrina may be the largest insured event in history, but its economic impact is dwarfed by incalculable cost in human lives, pain and suffering. It comes in a quarter that has seen numerous other catastrophes and large loss events. Nevertheless, these events are within PartnerRe’s modeled exposures and well within our financial capacity to meet them.”
He added that PartnerRe expects “no change in our risk capacity or our risk appetite in the upcoming renewal season.”
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