The U.K.’s Catlin Group Limited announced that its Bermuda operating subsidiary has completed its initial estimate of losses arising from Hurricane Wilma and has also reviewed its loss estimates for Hurricanes Katrina and Rita. Losses from Wilma are estimated at approximately $45 million, net of reinsurance.
Catlin said, “there has been no material change to the estimated net loss of approximately $60 million from Hurricane Rita previously advised to the market.” However, Catlin noted that on Oct. 19 it had “affirmed its loss estimate for Hurricane Katrina of $275 million gross and $125 million net of reinsurance. That estimate was consistent with a market loss of $40 billion.
“Since that time, little detailed loss information has emerged. However, anecdotal information, loss advices on individual inwards reinsurance contracts and the weight of market commentary suggest that the market loss is likely to exceed that amount.” The company said it had therefore increased its net loss estimate for Hurricane Katrina by $75 million to $200 million.
Catlin added that its “direct insurance losses with respect to Hurricane Katrina continue to be within expectations, and significant reinsurance protection remains for those accounts. Loss details for the catastrophe reinsurance book, which is not reinsured, remain incomplete. While the loss notifications received to date in these classes are unsupported by detailed information or analysis, they have been larger than initially anticipated.” Catlin’s estimated net losses from Katrina, Rita and Wilma now total approximately $305 million.
The insurer indicated that, “in spite of the unprecedented natural catastrophe losses during 2005, Catlin remains optimistic that it will achieve a small profit for the year. This demonstrates the strong underlying performance of Catlin’s portfolio.”
CEO Stephen Catlin noted: “The global insurance industry has experienced an unprecedented level of losses from Hurricanes Katrina, Rita and Wilma, which will create challenges for the market. However, the net losses sustained by Catlin are broadly consistent with our modeled assumptions for events of this magnitude.
“Catlin’s balance sheet remains strong. This demonstrates the value in Catlin’s strategy of underwriting diverse classes of business and continually seeking uncorrelated risk. As the year-end renewal season begins, we are ready to take advantage of significantly improved underwriting opportunities across our portfolio.”
Was this article valuable?
Here are more articles you may enjoy.