NU Online News Service, March 30, 3:06 p.m. EDT
Flagstone Reinsurance Holdings puts its losses related to the Tohoku earthquake in Japan in the range of $80 million to $130 million net of reinstatement premiums and retrocession.
In the meantime, specialty insurer Hiscox says it could get claims of between $60 million and $150 million.
Flagstone’s retrocession strategy includes buying protection for single events and an accumulation of events, and the company has additional protection “that is in effect reducing our net exposure to both Japanese and New Zealand losses, particularly at the higher end of our ranges,” says CEO David Brown in a statement.
Flagstone says it expects its losses from the New Zealand quake to be between $60 million and $90 million, net of reinstatement premiums and retrocession.
Flagstone’s estimate of Japan losses is based on estimates of industry loss of between $25 billion and $35 billion, the company says. Hiscox says its estimate is based on a model showing insured market loss of $24 billion.
About a week ago, Moody's Investors Service placed Luxembourg-based Flagstone’s financial-strength rating under review due to the company’s expected losses from first-quarter catastrophes.
Hiscox Chief Underwriter Officer Robert Childs says the events of the first quarter (the company said losses from the New Zealand quake and flooding in Australia will fall between $96.4 million and $241 million) “will only minimally impair our own reinsurance program.” Rates in affected regions have significantly increased and the company expects “this pressure to become widespread,” he adds.
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