Tuesday, March 9, 2010

Insurance Industry Chile Quake Loss May Hit $10B: PartnerRe

PartnerRe Ltd. said it expects insurance industry losses from the Chile earthquake could hit $10 billion and its own expected claims could exceed $300 million.

Its estimate for the impact on the industry is $2 billion higher than the largest catastrophe modeling firm estimate of $8 billion. PartnerRe also released an industry loss estimate for European Windstorm Xynthia of up to $4 billion.

The Bermuda-based company said it expects between $220 million and $320 million in pre-tax claims from the Chile quake and total insured industry losses from the magnitude 8.8 event will be in the range of around $6 billion to $10 billion.

The company said its loss estimate is net of reinstatement premium and retrocession and is based on a top down analysis as well as on model output, the assessment of individual treaties and client data, and is consistent with the company's market position in the region.

It said its claims relating to the earthquake are expected to be contained primarily within the Global Property & Casualty, Catastrophe and Paris Re subsegments.

PartnerRe noted that its estimate is preliminary, as there is limited actual loss data. As additional information is received, particularly relating to potential structural damage in the capital of Santiago, the company said it will update its estimate.

European Windstorm Xynthia, which struck Europe over the weekend of February 27-28, PartnerRe said is estimated to have caused industry losses in the range of $2 billion to $4 billion.

The storm swept across several European countries including Portugal, Spain, France, Belgium, the Netherlands, Luxembourg and Germany. The company said it expects its claims relating to Windstorm Xynthia will be $40-to-$70 million pre-tax and are expected to be contained primarily within the Catastrophe and Paris Re subsegments. This estimate is net of reinstatement premium and retrocession.

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