Bermuda-based Validus Holdings, Ltd. announced that it expects Hurricanes Ike and Gustav will negatively effect the third quarter of 2008 by approximately $165 million and $20 million, respectively. The majority of claims for both storms were from Validus Re, i.e. the reinsurance segment of the Company’s operations.
Chairman and CEO Ed Noonan commented: “Regarding Hurricane Ike, we believe that currently reported industry loss estimates in the $8 billion – $12 billion range significantly underestimate the likely insured cost of this storm.
“Although Ike was a Category 2 storm on the Saffir-Simpson Hurricane Scale at landfall, we believe the large wind field and the storm’s high integrated kinetic energy, combined with wind damage through the Ohio Valley are not fully contemplated in current industry estimates.
“In addition, our view of the loss to the offshore energy markets caused by Hurricane Ike lead us to conclude that currently reported industry estimates for this segment are likely to increase. Our estimates for Hurricane Ike are predicated on an industry loss of $15 billion – $17 billion, comprised of $13 billion – $15 billion onshore, and $2 billion – $3 billion from offshore energy.”
Validus said its loss estimates are net of reinstatement premiums, reinsurance and other recoveries. The loss estimates are based on Validus’ evaluation of impacted contracts and information provided by customers and intermediaries. Validus’ actual losses from these events may vary materially from these estimates due to inherent uncertainties resulting from this preliminary information.”
Source: Validus Holdings – www.validusre.bm
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