HCC Insurance Holdings Inc. announced that anticipated claims from Hurricane Katrina are expected to result in the company’s largest gross loss in its history, estimated at $160 million arising from aviation, onshore and offshore energy, property, marine and other specialty lines of business.
This loss is estimated to be $50 million net of reinsurance including reinsurance reinstatement costs, $32.5 million after tax, and will reduce third quarter earnings of the company by approximately $0.30 per diluted share.
Stephen L. Way, chairman and chief executive officer, said, “Our exposure is predominantly to energy and large commercial property accounts and is substantially protected by catastrophe reinsurance.” Way added, “From an industry standpoint, premium rates will need to rise significantly in these lines of business to reflect both the increased frequency and severity of catastrophic events that have occurred over the past five years.”
HCC is an international insurance holding company and a leading specialty insurance group since 1974, based in Houston, Texas, with offices across the U.S. and in Bermuda, England, and Spain.
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