The St. Paul Travelers Companies Inc. announced that its preliminary estimate for losses relating to Hurricane Katrina is approximately $800 million, after tax and after the impact of reinsurance, and including the cost of reinsurance reinstatement premiums. The $800 million estimate assumes a gross loss of $2.5 billion from St. Paul Travelers’ Commercial, Personal and Specialty businesses, including losses arising from its International and Lloyds operations.
The preliminary estimate was developed through an analysis of claims reported and anticipated to be reported, values of properties in the affected areas, damage projections estimated by wind force and the presence of other perils, anticipated costs for demand surge and other factors of considerable judgment.
After payment of reinstatement premiums, the company has coverage for one additional occurrence under its Corporate Catastrophe Treaty and continuing protection under most of its other treaties.
Due to the unprecedented nature of this event, there can be no assurance that St. Paul Travelers’ ultimate costs associated with Hurricane Katrina will not exceed these estimates.
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