RSA, Wellington Estimate U.K. Storm Losses

November 10, 2000

Royal & Sun Alliance (RSA) estimates that it could face claims of £100 million ($145 million) or more from the current storms sweeping the U.K. Lloyd’s insurer Wellington said the events over the last three weeks may mean a market loss of £750 million ($1.09 billion), and, as the storms continue, even these estimates may be too low.

Following CGNU’s estimate of a possible £200 million ($290 million) loss exposure from the bad weather, and Risk Management Solutions’ (RMS) overall estimates of £500 million ($725 million) {See related story}, it’s clear that until the weather finally clears, and people can return to their homes and businesses, no estimates can be considered definitive.

RSA CEO Bob Mendelsohn told Reuters News Agency that “Estimates are very preliminary and may vary significantly, upward or downward, as events develop.” He also added that the damage claims would have an impact on 4th quarter results for the company, but, like CGNU, excessive losses were covered by adequate reinsurance.

The bad news for RSA comes on top of good news, as it reported that overall profits rose from £430 million ($624 million) for the nine month period ending September 30th 1999 to £502 million ($728 million) this year.

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