Bermuda-based Validus Holdings, Ltd. announced that its initial estimate of the net negative financial impact from Hurricane Sandy is $331.1 million. The bulletin explained that the figure is “net of reinstatement premiums and reinsurance, retrocessional and other recoveries.”
It is also apportioned “between Validus’ operating segments as $256.2 million to the Validus Re segment and $76.9 million to the Talbot segment,” and is based on “estimated insured industry losses of approximately $25 billion.”
Chairman and CEO Edward J. Noonan commented: “Hurricane Sandy was a large, complex loss event impacting our business across all of our operating segments and through multiple classes. As a leader in both the property catastrophe and marine classes, we see this event as being both unique and difficult for our clients to reserve.
“Our estimate of the net negative financial impact from Hurricane Sandy corresponds to an industry-wide insured market loss in excess of $25 billion, which appreciably exceeds industry loss estimates implied by the aggregate losses reported to us to date by our ceding clients.
“We have undertaken a thoughtful review of our property, marine and specialty exposures in the affected region in arriving at our initial estimate of the net negative financial impact from Hurricane Sandy, but would caution as noted below that all estimates should be considered preliminary at this point.”
In addition the announcement noted: “Separate from these figures is the estimate of net negative financial impact from Hurricane Sandy to Flagstone Reinsurance Holdings, S.A., which on the same net basis as described above is $39.1 million. The net negative financial impact to Flagstone will not impact Validus’ results of operations in the fourth quarter 2012 as the loss event took place prior to the date of Validus’ acquisition of Flagstone which was completed on November 30, 2012.
“The above estimates are based on Validus’ current evaluation of impacted contracts and information provided by customers and intermediaries. Validus’ actual losses from this event may vary materially from this estimate due to uncertainties inherent in this preliminary information.”
Source: Validus Holdings
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