Everest Re Group Ltd. announced from its Bermuda headquarters that its losses from Hurricane Katrina could amount to approximately one percent of the total insurance industry losses. This would put the estimates in the $400 million range, based on a $40 billion industry loss figure.
The company added, “absent other significant events, however, Everest still anticipates net income for the year, accompanied by capital growth over its December 31, 2004 position.”
In explaining how it had calculated the estimates Everest said they were based on a “combination of modeled information, underwriter analysis, preliminary client discussions, and an early profile of exposed limits within the affected regions.
“The unprecedented nature and scale of the loss and the lack of credible data from ceding companies have hampered the estimating process and will introduce significant complexity, uncertainty and delay into the loss adjustment and settlement processes. Additionally, legal and regulatory issues have the potential to further complicate the situation. Everest continues to analyze available and emerging information to refine its estimates of potential exposure but expects this process will unfold over several weeks or even months.”
Chairman and CEO Joseph V. Taranto commented, “We, at Everest, are deeply saddened by the devastation of Katrina and the toll it has taken on so many people. The scope and scale of this loss will have far reaching implications; many of which will not be known for some time.”
“While the impact of Hurricane Katrina will be significant, it is within our risk management tolerance and does not change our positioning or underlying fundamental financial strength,” he added.
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