Bermuda-based PartnerRe Ltd. has issued a bulletin giving its initial loss estimates from Hurricane Wilma, and increasing those from Katrina and Rita. The company also gave details of its revised financial plans for 2006.
The Company said it “now expects claims of approximately $525 million for Hurricane Katrina, approximately $85 million for Hurricane Rita, and approximately $67 million for the flooding in Central Europe. In total, these new estimates represent a $62 million increase from the Company’s prior estimate of $615 million and this increase will be reflected in the Company’s fourth quarter results.” The estimates are on a “pre-tax” basis.
The bulletin noted that industry losses from “Hurricane Wilma are more than $2 billion in Mexico and between $10-$12 billion in Florida. Based on these estimates, the Company anticipates claims of between $190-$210 million for Hurricane Wilma, with approximately 30 percent of the loss coming from Mexico.”
PartnerRe stressed that its loss estimates “are based on early indications from clients and brokers, as well as modeling. These loss estimates are preliminary and are based on currently available information. Therefore, these estimates are subject to change due to refinement in the overall industry loss estimates and by individual treaty reports.”
Concerning its plans for 2006 President and CEO Patrick Thiele made the following statement: “The reinsurance market remains competitive with substantial price increases only in those lines that were directly affected by the numerous catastrophes of 2005. Certain lines and markets that were not affected by those major catastrophes, including Asia, portions of Europe and selected specialty lines, are increasingly competitive. In addition, many cedants continue to increase their net retentions and are moving from quota share to excess of loss coverages, reducing the amount of premium in the reinsurance marketplace. Nonetheless, this is an environment in which PartnerRe, with its broad diversification, financial strength, client relationships, technical skills, and multiple distribution channels, can be successful.”
PartnerRe noted that it would operate “within the context of these market conditions.” Therefore, “assuming a reasonable level of large losses, stable foreign exchange and interest rates, and healthy equity markets in 2006, the Company’s financial plan for 2006 anticipates a mid-teens operating return on beginning shareholders’ equity (year-end 2005 shareholders’ equity), and fully diluted book value per share growth in excess of 10 percent after dividends,” the announcement concluded.
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