Bermuda-based XL Capital Ltd. announced that, based on initial analyses performed by the Company and preliminary estimates received to date, its “net losses (excluding net reinstatement premiums) relating to Hurricane Katrina will be in the range of approximately one and three quarters per cent of the industry loss.”
As Industry estimates now range in the $40 billion level, with some going has high as $60 billion, XL’s net loss would be around $700 million. The bulletin said the “estimate is consistent with XL’s expectation for an event of this profile.” It added that it expects “the loss adjustment process for Hurricane Katrina will be protracted due to the complexity of the event. Accordingly, this estimate is subject to revision.”
President and CEO Brian M. O’Hara commented: “We believe that Hurricane Katrina could become the most costly natural catastrophe for our industry to date. Clearly, it has had unprecedented human costs and our sympathies go out to all of the victims and their families whose lives have been impacted by this tragic event.”
XL added that other catastrophe losses that occurred during the third quarter of 2005, including the European Floods, will be approximately $80 million pre-tax.
“Hurricane Katrina and the other third quarter natural catastrophes will adversely affect XL’s third quarter 2005 results,” O’Hara noted. “While these loss estimates impact XL’s previous guidance for 2005, we still anticipate an operating profit for the year barring any further significant adverse events.”
He added that, “we will be working closely with our customers over the upcoming months in addressing their losses in a manner reflective of XL’s commitment to those customers. We also believe that XL is well-positioned to participate in the upcoming renewal season as we expect no fundamental change in our risk appetite.”
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