Transatlantic Holdings Inc. (TRH) announced that its preliminary estimate of the pre-tax cost, net of reinsurance, of Hurricane Katrina will be around $270 million, or $176 million on an after-tax basis for the full year of 2005. “These amounts, which are inclusive of marine and energy losses, also reflect the net cost of reinstatement premiums based on preliminary loss estimates,” said the bulletin.
As with most of the estimates concerning Katrina, TRH cautioned that they “include a significant amount of judgment and consider industry loss predictions, output from catastrophe modeling software, market share analysis and a review of certain large in-force contracts. Due to the unprecedented nature of this event, including the related legal and regulatory uncertainty, and the preliminary nature of the information used to prepare these estimates, there is material uncertainty at this time as to the ultimate costs that TRH will bear.”
The estimates also have some significance for AIG, which owns a 59.3 percent stake in TRH.
The bulletin also indicated that the global reinsurer “estimates that pre-tax losses from other third quarter 2005 catastrophes to date will approximate $30 million, or $20 million on an after-tax basis for the full year of 2005.”
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