Catastrophe reinsurer PartnerRe has become the first of the Bermudians to report its assessment of Hurricane Katrina losses.
In a statement released yesterday (8 August) PartnerRe said it was expecting total insured losses for the industry in the range of $30-35bn.
Based on that analysis, it said, and including the effects of other recent catastrophes (aviation losses, Atlantic Hurricanes Dennis and Emily, two typhoons in Japan and China, and flooding in India and Central Europe, among them) – shareholders would experience a decline of “no more than 10 percent” from the $3.482bn shareholders’ equity reported at June 30, 2005.
PartnerRe said the assessment was based on the assumption that there would be no further significant catastrophe losses and no significant movement in credit and equity markets for the remainder of the quarter.
In a press statement, PartnerRe president and CEO Patrick Thiele said: “We believe that Katrina may be the largest insured event in history, but its economic impact is dwarfed by incalculable cost in human lives, pain and suffering. It comes in a quarter that has seen numerous other catastrophes and large loss events. Nevertheless, these events are within PartnerRe's modeled exposures and well within our financial capacity to meet them.”
Thiele added: “We expect no change in our risk capacity or our risk appetite in the upcoming renewal season.”
When contacted by Insider Week, a spokesperson for PartnerRe declined to elaborate on a specific loss estimate or to make any comment beyond their published statement.
As the first Bermudian to report on Katrina, PartnerRe’s statement can perhaps be viewed as a bell weather for the scale of loss experience by the island’s catastrophe reinsurers.
Meanwhile, Toronto based Fairfax Financial Holdings said its potential net losses from Hurricane Katrina were in the range of $175-220mn before tax and minority interests.
Post taxes and minority interests, Fairfax said the figure came to $108-134mn.
The company said its estimate is based on a preliminary review and on an estimated total insured loss from Hurricane Katrina of $30bn.
Separately, AM Best announced this morning (9 September) that it has placed the ratings of GoshawK’s Bermudian reinsurance operation, Rosemont Re, under review with negative implications.
The move comes after the reinsurer announced net losses from Hurricane Katrina of around $25-30mn and that marine energy losses for Hurricane Ivan had deteriorated during the second quarter of 2005.
The ratings agency said it was “concerned that the combination of these events, in addition to negatively affecting Rosemont’s operating profit projections for 2005, will also negatively affect Rosemont’s prospective risk-based capital in light of its property catastrophe business profile”.
Rosemont Re currently has financial strength ratings of A- (Excellent) and issuer credit ratings of a-.