Bermuda-based Validus Holdings, Ltd. Has issued a comment on worldwide loss activity occurring in the first quarter of 2011, including the February 22 New Zealand earthquake.
The 6.3 magnitude earthquake which struck the South Island of New Zealand near Christchurch caused significant loss of life and damage to property. Validus said that “given the magnitude and recent occurrence of this event, there is a lack of data available from industry participants and clients, resulting in significant uncertainty with respect to potential insured losses, and also with respect to the Company’s potential losses from this event.
“However, based on current preliminary loss estimates from commercial catastrophe model vendors and the Company’s own internal analysis, the Company currently anticipates that the total insured industry loss from the February 2011 New Zealand Earthquake will be larger than the September 4, 2010 New Zealand earthquake which measured 7.1 in magnitude.”
Validus noted that, based on this analysis, it believes that for “insured industry losses ranging from NZ$8.0 billion to NZ$10.0 billion (approximately US$6.0 billion to US$7.5 billion at current exchange rates), the Company currently expects its loss from the February 2011 New Zealand Earthquake to be in the range of US$25.0 million to US$50.0 million.”
In addition Validus said it currently expects that insured losses in the first quarter of 2011 will include “the January floods in Australia, Cyclone Yasi in Australia, civil unrest in Northern Africa and the Middle East, damage to an offshore energy platform and the above-mentioned February 2011 New Zealand Earthquake.”
Validus indicated that it doesn’t “expect its aggregate losses arising from these events to have a material impact on its shareholders’ equity and after considering these events, the Company continues to expect to report positive net operating income for the three months period ending March 31, 2011.”
Source: Validus Holdings
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