Aspen Updates New Zealand Earthquake Costs
Bermuda based Aspen Insurance Holdings Limited yesterday [Dec 16] updated its pre-tax loss estimate for the New Zealand earthquake, which occurred in September 2010, from $20 million to $53 million, net of reinstatement premiums. This equates to $47 million post tax.
Aspen said “The upward revision reflects new information and is mainly due to one large domestic New Zealand cedant, which comprises approximately 81% of Aspen’s total loss estimate for this event. Aspen’s initial estimate of a NZ$2.2 billion loss for this cedant included a margin for conservatism above the top end of the client’s original estimated range of NZ$1-2 billion. The latest information from this client indicates a substantial increase with a wide range of possible outcomes. Given the continuing uncertainty associated with this loss, Aspen has now concluded that it is prudent to reserve at a total loss for Aspen’s shares on this program, which assumes a loss of at least NZ$3.5 billion for this client. Aspen has also reserved at a total loss for all other domestic New Zealand placements. The balance of Aspen’s loss is $5 million and comprises shares on programs for clients domiciled outside of New Zealand which include some New Zealand exposure.”
