NU Online News Service, Feb. 28, 11:19 a.m. EST
Flagstone Reinsurance Holdings said losses from natural catastrophes in Australia during the first quarter are expected to be between $60 million and $80 million, while Validus Holdings said last week’s Christchurch, New Zealand earthquake could cost the company between $25 million and $50 million.
Validus said its preliminary loss estimate for the quake is based on commercial catastrophe model vendors and the company’s analysis. The company noted that this event will produce greater losses for it than last year’s 7.1 magnitude earthquake in New Zealand.
Validus said it believes insurance industry wide losses from the event could run somewhere in the range of $6 billion to $7.5 billion.
Flagstone Re said it is too early to estimate its claims from the earthquake, but noted, “The company is protected by multiple layers of reinsurance which could be triggered should this loss prove to be significant. This event is expected to cause sizable losses to the insurance industry.”
Guy Carpenter said the New Zealand earthquake will not be the type of event to harden the reinsurance market. David Flandro, global head of business intelligence for the reinsurance intermediary, said global reinsurance capacity remains more than adequate.
Luxembourg-based Flagstone Re said the catastrophes in Australia during the 2011 first quarter include flooding in Queensland and Victoria in January as well as February’s Tropical Storm Yasi, which also struck Queensland.
The loss estimate is based on Flagstone Re’s modeling analysis, assessment of treaties and client data, and third-party models.
Bermuda-based PartnerRe Ltd. and XL Group have also released Australia-related loss estimates. PartnerRe Ltd. has said it is estimating 2011 first-quarter losses from catastrophe activity in Australia to be between $80 million and $110 million. XL Group said it expects losses from the January flooding to be between $75 million and $95 million.
Additional reporting by Mark E. Ruquet
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