AXIS Estimates NZ/Aussie Loss: Up to $315m
AXIS Capital Holdings Limited estimated that the total net impact of the New Zealand earthquake and loss events in Australia that have occurred to date in the first quarter of 2011 will be between $275-$315 million. Loss estimates are pre-tax and net of reinstatement premiums.
A spokesperson said, “The total net impact of the New Zealand earthquake in the first quarter of 2011 is expected to be between $185-$215 million. The total net impact of loss events in Australia that have occurred to date in the first quarter of 2011 is expected to be between $90-$100 million. The Company has assumed a total loss to the vast majority of its reinsurance treaties exposed to the New Zealand earthquake, including a significant treaty exposed to a government-owned provider of residential earthquake coverage. Losses for the New Zealand earthquake and loss events in Australia that have occurred to date in the first quarter of 2011 are expected to primarily impact the reinsurance segment of the Company. The net impact from the New Zealand earthquake to the Company’s insurance segment is not expected to exceed $20 million due to reinsurance coverage limiting net retentions in the segment and the net impact of the loss events in Australia are not expected to be material to this segment.”
“The Company’s loss estimate ranges for the New Zealand earthquake and the loss events in Australia are primarily based on the Company’s ground-up assessment of individual contracts and treaties in the affected regions and are consistent with the Company’s market position in the respective regions impacted by these catastrophe events. Other information considered in developing net loss estimates includes current industry insured loss estimates, market share analysis, catastrophe modeling analysis and limited information from clients, brokers and loss adjusters. AXIS Capital currently estimates that industry losses will be in the range of $8-$12 billion for the New Zealand earthquake and in excess of $6 billion for the loss events in Australia that have occurred to date in the first quarter of 2011.”
“The Company has initiated its estimation process in connection with expected losses related to the recent earthquake and tsunami in Japan. Current industry loss estimates for this event from property catastrophe modeling agencies range from $12-$35 billion. The Company believes it is too early to issue an industry loss estimate or a Company loss estimate at this time. However, based on its modeling of earthquake events in Japan, the Company does not expect its share of industry losses emanating from its reinsurance segment to exceed 1.3% of total industry loss and the net impact to the Company’s insurance segment is not expected to exceed $25 million due to reinsurance coverage limiting net retentions in the segment.”
