Posted on 12 Jul 2013 by Neilson
XL Group plc said it's estimating $135 million in second-quarter natural catastrophe losses, with about half of the losses stemming from the recent floods in Europe. The estimate is pretax and net of reinsurance and reinstatement premiums, XL said.
The company's insurance business is bearing about 55% of the losses with the reinsurance business being responsible for the other 45%. Losses contributing to this estimate include flooding in Europe, Argentina and Canada, and tornadoes and hailstorms in the United States.
A spokeswoman for XL also confirmed the company is one of the insurers covering the Montreal, Maine & Atlantic Railway, which owns the train that exploded in Canada on July 6, killing as many as 50 people. She declined to give specific details about the policy and the limits involved. The train was carrying 72 carloads of crude oil when it rolled from a parking spot and crashed in the Quebec town of Lac-Megantic.
Earlier this week, Validus Holdings Ltd. said it expects the severe flooding in central Europe in May and June to cost the company about $69.6 million, with the total industry losses estimated to be $4 billion to $5 billion.
The recent flooding is the worst to hit Central Europe since 2002, which resulted in economic damage of 17 billion euros (US$22.2 billion) and estimated insured losses of 3.4 billion euros according to BestLink, A.M. Best's online financial system. However, in the past decade, flood protection has improved and insurers have introduced higher deductibles or withdrawn cover in loss-prone areas.
XL's insurance subsidiaries currently have Best's Financial Strength Ratings of A (Excellent). At market close July 11, shares of XL (NYSE: XL) were trading at $31.55, up 1.97% from the previous close.