Chaucer’s Gustav/Ike Losses at $55 Million; Investment Loss $47 Million

October 22, 2008

Chaucer, the specialist Lloyd’s insurance group, announced that its preliminary loss estimates for hurricanes Gustav and Ike – net of reinsurance and reinstatement premiums – is approximately $55 million (See also Lloyd’s estimates at IJ web site:

“This is broadly consistent with Chaucer’s year to date budget for catastrophe claims and, in the absence of further insurance catastrophes, should not have a material adverse effect on the Group’s expected underwriting result for the period,” the bulletin added.

Chaucer also indicated that its “investment portfolio has been affected by the current turmoil in the financial markets, not only in equities and hedge funds but also because of the widening of spreads in credit markets.

“For the 9 months to 30 September, investment losses were £29 million ($47.3 million) (a return of -2.8 percent). At 30 September 2008, the group’s investments were £1.1 billion ($1.8 billion).” They were broken down as follows – Cash 27 percent – Fixed income securities 21 percent – Absolute return bond funds 34 percent – Hedge funds 12 percent – Equities 6 percent.

Chaucer will issue its interim management statement on November 13, 2008. The announcement indicated that “these estimates do not alter Chaucer’s intentions with regard to the final dividend for 2008.”

CEO Ewen Gilmour added: “Hurricane Ike is likely to have caused one of the largest hurricane losses in US history. We expect the impact on Chaucer, though commensurate with a major market loss, to reflect recent reductions in our energy exposures in the Gulf of Mexico. Additionally, these events, combined with the instability of financial markets, are likely to have a beneficial effect on premium rates in energy and US property classes.”

Source: Chaucer plc –

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