Asian Quake Death Toll Over 50,000: The 7.6 magnitude earthquake that struck near Muzaffarabad in Pakistan-administered Kashmir on Oct. 8 killed over 50,000 people in the country. Another 1,400 died on the Indian side of the border. The number of injured is estimated at over 100,000 in one of the world’s poorest and now one of its least accessible regions. But even more people may die unless they receive help. The world is beginning to meet the calls from the U.N. and numerous aid agencies for an increased international effort to get relief supplies, especially tents and blankets, to the region before the first snows begin falling in the Himalayas. “All humanitarian organizations are acutely aware that our window of opportunity for action is closing with the onset of the severe winter,” UN relief coordinator Jan Egeland stated at a recent donor Conference in Geneva. Not only does the severe weather threaten further deaths, but it also makes it more difficult to deliver supplies by air, which in much of the stricken region remains the only available route. Additional pledges totaling $580 million were given at the conference, but more is needed. The World Food Program said some 500,000 people in remote areas have yet to receive any aid at all. An estimated three million people have lost their homes, triggering fears that a second wave of deaths from untreated injuries and exposure and will result in many more deaths.
More Hurricane Loss Estimates: Even before moving on to Wilma, a number of European and Bermuda-based insurers continued to report or revise loss estimates from Katrina and Rita. Their figures are almost entirely based on industry insured loss estimates of around $40 billion. A summary of the latest figures includes the following:
Zurich Financial Services Group expects aggregate claims payments related to Hurricane Katrina of approximately $600 million after tax, net of reinsurance recoverables and reinsurance restatement premiums and is based on an estimated loss after reinsurance and before tax of $725 million.
Aspen Insurance Holdings Ltd. said its retained losses, after recoveries from its outwards reinsurance program and the impact of outwards and inwards re-instatement premiums, are likely to be between $325 million and $400 million on an after tax basis. Gross losses are estimated at between $840 and $925 million.
PartnerRe Ltd. gave third quarter loss estimates of between $560-$590 million on a pre-tax basis. This includes estimates of between $470-$490 million relating to Hurricane Katrina, between $30-$35 million relating to Hurricane Rita, and $60-$65 million for the flooding in Central Europe.
Everest Re Group Ltd. said its net pre-tax catastrophe losses from the third quarter events are expected to be significant; the principal components being $638 million attributable to Katrina and $54 million attributable to Rita.
Platinum Underwriters Holdings Ltd. put its losses, net of reinstatement premiums, tax benefits and retrocessional recoveries, from Hurricane Rita at about $45 million.
Odyssey Re Holdings Corp., in which Canada’s Fairfax Financial Group has an 80 percent stake, expects approximately $225 million before taxes, and an after-tax net loss of approximately $146 million-net of applicable reinsurance and reinstatement premiums. The company had earlier put losses for Katrina at $80 to $100 million, before taxes.
The U.K.’s Goshawk Insurance Holdings plc has increased its gross hurricane loss estimates by 30 percent-from $99 to $130 million. For Katrina the estimate is now up to $60 million net from an earlier $25-30 million. Rita’s net losses are estimated at $30 million.
The U.K.-based Lloyd’s and specialty insurer Hiscox Plc gave preliminary loss figures for Rita of around $70 million. It also upped its Katrina loss estimates to $110 million from $100 million.
Allied World Assurance Holdings Ltd. said it expects net losses arising from Hurricane Katrina to be in the $200 to $250 million range.
The U.K.-based Catlin Group put its losses from Rita at around $90 million gross and net of reinsurance and $60 million on a net basis.
Lloyd’s CEO Leaves Post to Join the Pru: Nick Prettejohn will leave his post as CEO of Lloyd’s of London at the end of the year to join the U.K.’s Prudential Plc., the country’s second largest life insurer, as head of domestic operations. Lloyd’s said Luke Savage would take over as acting chief executive until a successor is in place. The process for appointing a successor will be overseen by Lloyd’s Nominations, Appointments and Compensation Committee. Prettejohn has been instrumental in reforming Lloyd’s operations and business processes-bringing in the franchise system, annual accounting, back office procedural reform, and uniform line slips as part of the LMP (London Market principles) initiative.
Chubb Moves Re Business to Harbor Point: Chubb Corp. has entered into a three way transaction with the investment firm Stone Point Capital LLC to set up a Bermuda-based company, Harbor Point Limited, to take over its reinsurance business. Harbor will acquire the ongoing business of subsidiary Chubb Re, Inc., including the renewal rights to Chubb Re’s in-force book of business, as of Dec. 31, 2005, but will not assume liabilities incurred before that date. Chubb will retain those liabilities and the related assets and reserves. Harbor Point manages the Trident III fund-originally set up by MMC Capital-which has committed $200 million to the deal. The management firm will pay Chubb $200 million in the form of a five year 6 percent convertible note and warrants, representing 16.25 percent of the new company. John Berger will head the new company as president and CEO. He has served as president and CEO of Chubb Re since 1998. Stephen Friedman, a senior advisor to Stone Point, and a former chairman of investment bank Goldman, Sachs & Co., will serve as Harbor Point’s non-executive chairman.
Fairfax Explains SEC Subpoenas: Canada’s Fairfax Group Holdings acknowledged the receipt of subpoenas from the Securities and Exchange Commission in connection with its ongoing investigation of into certain loss mitigation products. Fairfax also said it has not received similar subpoenas from the U.S. Attorney’s Office in New York. The company then issued a bulletin, which noted that, although the AG’s Office has not opened a formal investigation into the matter, it would be reviewing the information that Fairfax provides to the SEC in response to the subpoenas. Fairfax reiterated its intention to continue to cooperate with the SEC’s investigation.
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