Zurich-based reinsurer Converium has issued a statement indicating that increased industry loss estimates from Katrina have resulted in a new estimate of its potential exposure to between $20 and $40 million. It had previously announced preliminary estimates of between $10 and $20 million (See IJ Web site Sept. 2).
Converium said that it was now basing its estimates on an industry wide figure of $50 billion, instead of the $25 billion figure in its first estimates.
“The revised loss amount represents about 1 – 2 percent of Converium’s shareholders’ funds as of June 30, 2005 and is reflective of the Company’s reduced exposure in North America as a result of having placed Converium Reinsurance (North America) Inc. into run-off as well as the decision to write North American business from Zurich on a selective basis only,” the bulletin noted.
“Given the structure of Converium’s exposure any ultimate industry loss in excess of US$ 50 billion would have a disproportionately low impact on the Company’s loss estimate,” it added.
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