Reinsurers outline Chile costs

Reinsurers Scor, Validus and Flagstone have published their estimates for the Chile earthquake and windstorm Xynthia claims.

Scor estimated the Chile quake would cost it €95m net pre-tax – about 3% of the projected annual net earned premiums of SCOR Global P&C, or half of the annual cat budget.

“There is, however, a strong component of uncertainty at play: approximately half of the losses are estimated to come from SCOR treaty business, with expected market losses ranging between $5.5bn and $8.5bn. The rest of the losses relates to the facultative book and contains a higher degreeof uncertainty.”

Scor said the Haiti quake on 12 January 2010 will cost it approximately €27m net pre-tax.

And Scor said windstorm Xynthia would cost approximately €35m net pre-tax, based on estimated market losses of €2.5 – €3.0bn concentrated in France and Germany.

Validus

Bermuda reinsurer Validus expects its Chile quake loss to be in the range of $170m to $270m, net of reinstatement premiums and reinsurance, retrocessional and other recoveries.

Validus Chairman and CEO Ed Noonan said: "Based on current estimates, the Chilean Earthquake is one of the largest non-US events in the history of the global reinsurance market. As one of the world's leading catastrophe reinsurers, Validus is committed to supporting our clients in Chile and around the world in the aftermath of this devastating event."

Validus said European windstorm Xynthia costs would be in the range of $20m to $30m, net of reinstatement premiums and reinsurance, retrocessional, and other recoveries.

Flagstone

Bermuda reinsurer Flagstone said its Chile exposure would be $50m net of reinstatement premiums and retrocession.

Windstorm Xynthia would cost it $3 - $6m net of reinstatement premiums and retrocession.

“Flagstone's loss estimates are based on its proprietary modelling analysis, the assessment of individual treaties, third-party vendor models, and client data,” it said. “These preliminary loss estimates will be refined as additional information is received from cedants.

“Because these are early estimates there exists the possibility of significant revisions as further data becomes available, and the company notes that the Chile losses in particular will only be known once a large number of buildings are inspected which will take some months.