Insured losses from the recent flooding in Australia could top $6 billion, and earnings estimates for Bermudan reinsurers are at risk as a result, Barclays Capital said Tuesday.
Barclays analyst Jay Gelb cited early estimates for $4 billion of losses from flooding this month and $2 billion from the floods in December.
Because both events were so large and happened on different calendars, that could force reinsurers into losses greater than those they expected for both last year and this year.
“We are not changing EPS estimates at this point for the reinsurers we cover, although our current (fourth-quarter) and 2011 estimates could be at risk especially for the Bermuda reinsurers,” Gelb said in a note.
The major Bermudan reinsurers include ACE Ltd and XL Group.
Reconstruction costs from the flooding are expected to peak at up to A$20 billion ($19.96 billion).
(Reporting by Ben Berkowitz; Editing by Steve Orlofsky)