Posted on 27 Dec 2012
Since Hurricane Sandy struck on the evening on Oct. 29, just southwest of Atlantic City, N.J., insurers and reinsurers have been working to quantify losses. Total insured losses could reach as high as $25 billion, according to RMS. The storm, larger than 2005s Hurricane Katrina, was only a Category 1 hurricane up to a few hours before landfall. Selected companies and their loss reports as of Dec. 20:
Ace INA Group
Ace Ltd. expects to lose $380 million, which is an after-tax and net of reinsurance figure. The loss estimate figure stems from commercial and personal lines, as well as the company's reinsurance operations.
American International Group
AIG, headed by CEO Robert Benmosche, estimates about $1.3 billion in after-tax losses, net of reinsurance. That reflects a pretax loss estimate, of about $2 billion.
Estimates a consolidated, after tax, net of reinsurance and reinstatement premiums figure of about $288 million, based on a pretax, net of reinsurance and reinstatements, number of $442 million. The pretax figure is made up of $265 million from Transatlantic Holdings Inc., $165 million from RSUI Group Inc., and $13 million from Alleghany's Homesite Group Incorporated investment.
Allstate Insurance Group
Allstate Corp., led by CEO Thomas J. Wilson, estimated its catastrophe losses for October would hit $1.08 billion, with Sandy being the largest of five cat events in that month. The loss estimate is pretax and net of reinsurance. Broken down by brand, pretax Sandy losses, net of reinsurance, were $975 million for Allstate, $95 million for Encompass, and $5 million for Esurance.
Alterra Capital Holdings Ltd.
Expects losses, before tax and net of reinsurance and reinstatements, between $90 million and $120 million.
The reinsurer expects losses, net of reinsurance and reinstatements, of 145 million ($236 million), but expects to be modestly above its catastrophe budget for the year.
Arch Capital Group Ltd.
Estimates losses between $170 million and $240 million, net of reinsurance and reinstatements. Losses stem 40% from insurance operations and 60% from reinsurance operations.
Assurant P&C Group
Expects pretax and net of reinsurance losses between $200 million and $220 million, and does not expect to exceed its 2012 property catastrophe reinsurance retention limit. The company said it has paid the majority of more than 13,000 Sandy-related claims on its own policies and processed about 9,300 claims for the National Flood Insurance Program.
Axis Capital Holdings Ltd.
Expects losses of about $300 million, which is net of tax, reinsurance recoveries and reinstatement premiums. That figure is likely to be evenly split between insurance and reinsurance segments. Reinsurance losses stem primarily from property catastrophe and property per risk treaty with commercial property exposure. The insurance segment losses are from commercial property and marine lines.
The company told investors to expect net losses to be about $90 million. Factoring in those losses, the company forecasted a 2012 combined ratio in the low 90s.
Catlin Group Ltd.
Estimates losses of $200 million, which is net of reinsurance and reinstatements.
The company and CEO John Finnegan estimates after-tax losses to be $570 million on an before-tax basis of $880 million. The estimates are net of reinsurance recoveries and also include reinsurance reinstatement premiums.
Cincinnati Financial Corp.
Expects to post $25 million to $35 million in pretax fourth quarter losses. Its commercial lines segment accounts for about two-thirds of the losses and 60% of its claims were from the Cleveland area, with about 20% from Pennsylvania. Most claims stemmed from wind damage or from water damage due to drain back-ups, hydrostatic pressure or roofs that leaked after unusually heavy rain.
FM Global Group
Sandy will be a significant loss-paying event for us given several factors, including the size and magnitude of the storm, Jon Hall, executive vice president said in an email to BestWeek. FM Global is one of the worlds largest business property insurers with a significant number of clients in the affected region; and we provide clients with large capacity for their exposures.
Hanover Insurance Group P & C Cos.
Expects after-tax losses between $120 million and $140 million, which will be unlikely to exceed the retention on its property catastrophe reinsurance program. The losses stem primarily from commercial multiple peril and homeowners business in New York and New Jersey.
Hartford Insurance Group
CEO Liam McGee and Hartford expect before-tax gross losses and loss adjustment expenses of about $370 million. Losses and loss adjustment expenses net of reinsurance are estimated at $350 million, before tax. About 60% of the losses stem from commercial property/casualty segment, with the balance from personal lines.
The company quantified net claims at about 90 million ($146.5 million), adding that considerable uncertainties exist around the overall impact.
Expects to post about $45 million in pretax losses in the fourth quarter. It does not expect to recover any losses from its catastrophe reinsurance program.
Lancashire Holdings Ltd.
Expects net losses between $40 million and $60 million, which factors in reinsurance and reinstatements, but does not include any benefit from industry loss warranties. It has $40 million of industry loss warranty cover, attaching at an insured market loss of $20 billion as reported by Property Claims Services.
The market pegs net claims before taxes between $2 billion and $2.5 billion. It expects minimal impact on member capital and no impact on the central fund.
Maiden Holdings Ltd.
Expects an underwriting impact, net of reinsurance and the company's quarterly provision for normalized catastrophe losses between $25 million and $35 million.
Estimates net pretax losses, including reinstatements, between $75 million and $125 million, which falls within its normal risk tolerances in the region affected by the storm.
Meadowbrook Insurance Group
The company expects about $5.1 million in claims, which are mainly limited to marine and properties in the Northeast.
Mercury General Corp.
Estimates losses of about $30 million and the after-tax impact on fourth-quarter earnings to be about $20 million.
MetLife Personal Lines Group
Company officials during a year-end conference call estimated gross losses of between $140 million to $160 million. After reinsurance recoveries and taxes, the losses are expected to be $85 million to $95 million.
Montpelier Re Holdings Ltd.
Expects pretax net loss of about $95 million, which is net of reinsurance and reinstatements.
The company as of Dec. 18 has fielded more than 38,000 Sandy-related claims, but did not provide any loss estimates.
NJM Insurance Group
Expects payouts to policyholders to reach $300 million, which is four times the amount paid out to policyholders following Hurricane Irene. If the payouts materialize, it will be the costliest event in the company's 99-year history, said the company, headed by CEO Bernard Flynn.
Novae Group plc
Expecting the net cost to be about $25 million to $30 million, which is about 5 million to 8 million ($13 million) above the company's normal allowance for fourth-quarter catastrophes.
Estimates fourth-quarter pretax losses, net of retrocession and reinstatement premiums, between $200 million and $240 million. Most of that number is from accounts with commercial lines exposure.
Philadelphia Insurance Cos./Tokio Marine US Group
The company said Sandy will bring losses of about 30 billion ($363.8 million) and the groups overseas subsidiaries are expected to bear about two-thirds of the projected losses.
Platinum Underwriters Holdings
Expects to post a $30 million net loss in its fourth-quarter results. The number is net of retrocessional coverage, reinstatement premiums and income taxes.
Progressive Insurance Group
The auto insurer said its total losses are about $90 million, raised from the initial estimate of $55 million. The total figure was revised when the company, led by CEO Glenn Renwick, released November earnings.
QBE Insurance Group
Expects losses from A$350 million (US$363.4 million) to A$450 million, which includes net retentions in its U.S. property/casualty business, its reinsurance business and marine and energy.
Selective Insurance Group
The company expects pretax, gross losses between $100 million and $120 million and a pretax net loss of about $52 million, which includes reinstatement premiums and reinsurance recoveries. About two-thirds of its claims are personal lines with the balance stemming from commercial lines.
State Farm Group
As of Dec. 11, the Ed Rust-led company fielded 108,200 homeowners claims and 17,673 auto claims in nine states, the District of Columbia and Ontario. New York accounted for 37.9% of the homeowners total, while New Jersey accounted for 28.9%, more than two-thirds of the homeowners claims.
Expects $900 million in claims, which is net of retrocession and before tax.
Tower Group Cos.
Expects direct insurance business pretax net loss up to $95 million. Its assumed reinsurance business expects losses up to $20 million pretax. It would recover $10 million if industry losses exceed $10 billion and another $10 million if industry losses exceed $15 billion through industry loss warranties that its ceded reinsurance business put in place in July 2012 to manage risk associated with its exposure in the Northeast. Michael H. Lee, president and chief executive officer, said Sandy will easily cause the largest catastrophic event in our history.
Expects after-tax and net of reinsurance losses of about $650 million. The insurer, headed by Jay Fishman, is estimating gross losses of $1.135 billion tied to the storm.
As of Dec. 14, USAA said it had about 63,000 claims. The company said they do not release monetary loss figures, and its annual financial results are due out in March.
W. R. Berkley Corp.
Estimated losses will be up to $50 million, before tax. The company, headed by William Berkley, said its estimate takes into account all currently available reinsurance and includes reinstatement premiums.
Expects it will lose $350 million. The figure is pretax and net of reinsurance and reinstatement premiums, the company said.
Zurich Insurance Group
Expects losses of about $700 million, net of reinsurance and before tax. The figure also includes $40 million related to Farmers Re stemming from coverage provided to the Farmers Exchanges, which are managed, but not owned by Farmers Group Inc. Headed by Martin Senn, it also expects reinstatement premiums due on reinsurance covers of $58 million.