Bermuda Reinsurers Preliminary Loss Estimates from Terrorist Attacks

September 17, 2001

A number of Bermuda-based insurers have extended their condolences to the families of victims of the terror attacks on the World Trade Center and the Pentagon. Bermuda’s two largest insurers, ACE and XL, made statements last week (See today’s national news, and IJ Website Sept. 14.) Several other companies have now made similar statements and given preliminary estimates of the amounts of the claims they expect.

Partner Re estimated that its damage claims would be in the $350 million to $400 million range. “Information is still incomplete, but based on our market share and treaty exposures to this marketplace, we expect damage claims to be from property, casualty and aviation programs written by our operations in the United States, Europe and Bermuda,” indicated CFO Albert Benchimol in a written statement.

CEO Patrick Thiele assured PartnerRe’s clients that the company was “willing and able to meet our commitments to the rebuilding of New York from these senseless attacks.” U.S. operations have been continuing without interruption from the company’s U.S. headquarters in Greenwich Conn., said the bulletin.

Trenwick Group Ltd. said its preliminary estimates of losses would be “approximately $50 million to $75 million, net of reinsurance recoveries.” The company indicated that the bulk of losses arose from catastrophe reinsurance underwritten by La Salle Re Ltd, and from airline liability and hull claims underwritten by Chartwell Managing Agents, Trenwick’s Lloyd’s operation.

PXRE Group Ltd. issued a statement indicating that its preliminary loss estimates were in the $30 to $35 million range, but warned that it would take some time to make a more accurate assessment. It said losses would be taken in the 3rd quarter and would not exceed 10 percent of the company’s capital base, “which is within its risk limits for a loss of this magnitude.”

IPC Holdings, the Bermuda-based reinsurer which is majority controlled by American International Group, indicated that its estimated losses would be in the $75 million range. CEO Joseph Johnson, who is also the Senior AIG Executive in Bermuda, said in a written statement that “AIG has confidence in the underwriting skills within IPC and that IPC’s strong financial condition will enable it to fulfill all of its obligations raising from this horrific tragedy brought about by cowardly acts of terrorism.”

From Barbados Everest Re Group Ltd. stated that its preliminary estimate of losses from last Tuesday’s attacks are in the $75 million range after taxes and reinsurance. It reassured customers and shareholders of the of the company’s financial strength, and expressed deep sympathy to all those “touched by this tragedy.” That feeling is universally shared by everyone in the insurance industry.

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