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Zurich Expects Claims of $700 Million from Sandy

Source: A.M. Best

Posted on 18 Dec 2012 by Neilson

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Zurich Sandy lossesZurich Insurance Group expects claims from Hurricane Sandy 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., the company said in a statement.

Zurich also said it expects reinstatement premiums due on reinsurance covers of $58 million. The estimates will be booked on fourth-quarter results, which will be released in February, the company said.

"This storm has shown us once again how powerful natural forces can be and what risks they pose," Chief Executive Officer Martin Senn said in a written statement.

Farmers spokesman Jerry Davies noted in an email to Best's News Service that Farmers is just starting to write business in New Jersey and New York as part of the company's East Coast expansion plans. He did not have specific claims figures immediately available.

Zurich said it had teams in areas affected by Sandy two days after the storm passed and made its first claims payments by Nov. 5, which is six days after the storm hit. Inspections of the large-loss locations were completed in mid-November. Zurich Insurance Co. Ltd companies currently have a Best's Financial Strength Rating of A+ (Superior).

Sandy struck on the evening of Oct. 29 just southwest of Atlantic City, N.J., as a post-tropical cyclone. Insured losses could reach up to $25 billion, according to RMS. Companies have been working to survey damage and quantify losses, which have been coming out recently, including:

Ace Ltd. expects to lose $380 million.

XL Group estimates $350 million in losses due to the storm. The figure is pretax and net of reinsurance and reinstatement premiums, the company said.

Platinum Underwriters expects to post a $30 million net loss from Sandy in its fourth quarter results, the company said. The number is net of retrocessional coverage, reinstatement premiums and income taxes.

Hartford expects about $370 million in losses.

American International Group Inc. estimates about $1.3 billion in after-tax losses.

Travelers Cos. expects losses of $650 million and gross losses of $1.135 billion.

New Jersey Manufacturers Insurance Co. expects policyholder payouts to exceed $300 million.

Swiss Re expects $900 million in losses.

Allstate Corp. expects $1.08 billion in losses.

QBE Insurance Group Ltd. expects losses from A$350 million (US$363.4 million) to A$450 millio.

Kemper Corp. expects $45 million in losses.

Cincinnati Financial Corp. expects 25 million to $35 million in pretax cat losses.

Tokio Marine expects losses of about 30 billion yen ($363.8 million).

Chubb Corp. estimated its after-tax Sandy losses at $570 million and a before-tax loss of $880 million.

Hanover Insurance Group warned investors that losses from Sandy will be between $120 million and $140 million, and will be unlikely to exceed the retention on its property catastrophe reinsurance program, according to a statement from the company.

Meadowbrook Insurance Group Inc. expects about $5.1 million in claims resulting from Hurricane Sandy. The claims are mainly limited to marine and properties in the Northeast.

Commercial insurer W.R. Berkley Corp. estimates losses from Hurricane Sandy will be up to $50 million, before tax, the company said in a written statement.