Flagstone Re announced that its preliminary estimates for losses occurring in the third quarter of 2011 are expected to total around $45 million. The losses that impacted its reinsurance segment were related to Hurricane Irene, floods in Denmark, and the U.S.
Flagstone said the “aggregate covers are expected to be approximately $20 million, $10 million, and $5 million, respectively, net of reinstatement premiums and retrocession. Furthermore, the Company expects its Lloyd’s segment to report a $10 million net loss for the quarter.”
Flagstone also said that “due to updated loss estimates for catastrophes that occurred during the first half of 2011,” it expects that its “collective loss estimate related to first half catastrophes will impact the third quarter by approximately $35 million, net of reinstatement premiums and retrocession.
“Lastly, weak financial markets in the third quarter will have a negative impact on the Company’s low duration fixed income investment portfolio of negative 1 percent.”
CEO David Brown observed: “2011 continues to be one of the most active years in terms of catastrophic loss events in history. While these events have continued to impact our industry, Flagstone’s overall capital levels remain stable and we expect to benefit from a hardening rate environment.”
Flagstone also cautioned that its “loss estimates are based on its proprietary modeling analysis, the assessment of individual treaties and client data, and third-party vendor models. These estimates may be further refined as additional information is received from cedants and there exists the risk for further revisions.
Source: Flagstone Re
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