News Briefs

European Insurers Estimate Katrina Losses: A disaster the scope of Hurricane Katrina hits everybody, not just U.S. carriers. The following are some of the preliminary estimates of anticipated losses from a number of European insurers: Amlin Plc, a leading Lloyd’s insurer, around $110 million; Germany’s Hannover Re net losses before tax around $250 million euros ($314 million); France’s SCOR Group between 25 and 35 million euros ($31.3 to $44 million); Converium gross losses in the range of $10 to $20 million; Swiss Re expects claims in the range of CHF 625 million ($500 million) before tax; Munich Re expects claims of approximately 400 million euros ($490 million) pretax, but not including reinsurance recoveries; Wellington PLC, a Lloyd’s insurer, which also has several U.S. subsidiaries, estimates claims at around $75 million; Royal & SunAlliance, which has less U.S. exposures than it used to, said claims would be around 25 million pounds ($46 million); Goshawk Insurance Holdings, another Lloyd’s and general insurer, put net losses in the $25 to $30 million range. Lloyd’s has not yet released any estimates, but London’s insurance community is widely reported to expect that its losses will be between 1 and 2 billion pounds ($1.84 billion and $3.7 billion). Other companies have not given preliminary estimates, but have indicated that they are working on them. The sheer size and scope of the disaster, coupled with the breakdown in communications and the difficulty of getting adjusters to the scene has hampered everyone’s efforts to compile loss estimates. With overall economic loss as high as $100 billion, and estimates of insured losses have gone as high as $60 billion, claims figures will probably rise.

Swiss Re Announces Earnings, Retirement: Swiss Re posted group net income of CHF 1.353 billion ($1.074 billion) for the first half of 2005, a 6 percent decline, compared to the CHF 1.441 billion ($1.144 billion) it earned in the same period of 2004. It also announced that CEO John Coomber is retiring, effective Dec. 31, but will take a seat on the Group’s Board of Directors. Swiss Re’s policy of not accepting or renewing marginal risks largely explains the decline. The world’s second largest reinsurer’s combined ratio for its P/C operations improved to 95.5 percent from 96.1 percent in the same period last year. Return on equity was 13 percent in line with the company’s target. Swiss Re’s Board of Directors has selected Jacques Aigrain, currently Deputy CEO, to succeed Coomber. His career includes an increasingly leading role with the Corporate Finance Team of investment bank JP Morgan in Paris, London and New York, where he helped build up a mergers and acquisitions department, before finally becoming Co-Head of Corporate Finance at the firm.

Indonesian Plane Crash Adds to Toll: Another plane crash, this time on the Indonesian island of Sumatra, has added to the grim death toll from a spate of recent airplane disasters. On Sept. 5 a Boeing 737-200, operated by low-cost airline Mandala, went down in the city of Medan, killing 100 people on board and another 47 on the ground. Remarkably 14 people survived. The cause of the crash, which occurred shortly after the plane took off on a flight to Jakarta, is still unknown. A survivor said the plane began to shake violently shortly after takeoff, then veered suddenly to the left, as a ball of fire erupted from the cockpit. The plane lost altitude and crashed into a crowded quarter of the city. The plane’s flight data recorder has been found, but has not yet been examined. Authorities say that so far they have found no evidence of terrorism as a cause of the disaster. The crash is the latest in a series of disasters that have claimed 448 lives since the beginning of August. All the fatalities involved secondary and charter airlines, prompting calls for greater scrutiny of the often aging and inadequately maintained aircraft run by such carriers. France joined Switzerland, the U.K; and the U.S. in publishing a list of companies that are prohibited from landing at French airports, and called for a Europe wide list to be adopted.

Three Fires in Paris Take 40 Lives: Two fatal fires in Paris and one the southern suburbs took the lives of 40 people in the space of 10 days. In the early hours of the morning on Aug. 26 a fire in a dilapidated building in Paris’ 13th Arrondissement left 17 people dead, including 6 children, and another 30 injured. Four days later another fatal building fire erupted in the French capital’s Marais District of the 3rd Arrondissement, claiming seven lives and injuring 14, three seriously. Both fires occurred in ill-maintained buildings housing immigrant families from Africa. Many such structures in and around Paris have been converted to temporary housing for those unable to find any other space. Local authorities and charitable organizations have been trying to improve safety standards in them, but bureaucratic red tape-many of the families involved lack official residence papers-has delayed doing so. The third fire, on Sept. 5, occurred in an 18-story apartment building in the Paris suburb of L’Hay-les-Roses. It left 16 people dead, including 3 children, and seven others in serious condition. The building, an HLM, or public housing, was in good condition, but the fire’s toxic fumes spread quickly. Most of the dead died from smoke inhalation. Three teenage girls are in police custody, accused of causing the blaze by setting fire to several mailboxes in the entrance to the building.

Topics Carriers USA Profit Loss Claims Europe Aviation Lloyd's Swiss Re