HCC Insurance Holdings Inc. announced that the Houston-based property/casualty insurer estimates a gross loss of $70 million from Hurricane Rita arising primarily from onshore and offshore energy, property, marine and other specialty lines of business. However, HCC still expects to be profitable for the third quarter of 2005.
The loss is estimated to be $20 million net of reinsurance including reinsurance reinstatement costs, $13 million after tax, and will reduce third quarter earnings of the company by approximately $0.12 per diluted share.
Stephen L. Way, chairman and chief executive officer, said, “Rita represents a significant energy insurance claim and once again highlights the inadequacy of current rating levels in this class to pay for such losses.”
Way added, “Despite two major hurricane losses and a reinsurance commutation charge, we still expect to make a small profit in the third quarter and anticipate achieving record earnings for the full year due to the continuing strength of our other lines of business.”
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