Advertise
Resources
Member, Beacon International Group, Ltd.
HAMILTON, Bermuda—Alterra Capital Holdings Ltd. has estimated that its losses as a result of the March 11 earthquake and tsunami in Japan could range from $60 million to $100 million before taxes and net of reinsurance and reinstatement premiums, the company announced Wednesday.
Based on an estimated total in event insured losses of between $20 billion and $35 billion, Alterra’s predicted losses could be much as 3.4% of the company’s 2011 opening shareholders’ equity, the Hamilton, Bermuda-based insurer said in a statement. That loss would fall within Alterra’s normal risk tolerances for a natural catastrophe in the region, the company said in the statement.
Alterra also owns a catastrophe bond with exposure to losses as a result of the March 11 event. With ultimate insurance loss levels from the event yet to be determined, the bond could produce an investment loss to Alterra of an additional $25 million.
Losses may be larger
“Loss estimates are still immature, and we are concerned that the final industry loss may be larger than many of the existing estimates,” Alterra President and CEO W. Marston Becker said in the statement. “Accordingly, our estimate of losses to Alterra reflects a wide range of potential industry outcomes.”
Alterra said its estimates are based on proprietary modeling analyses, industry assessments of exposure, claims information provided by its clients and brokers, and reviews of its current contracts. In addition to the usual caveats that accompany preliminary loss estimates—potential inaccuracies and inadequacies in data provided by brokers and clients, modeling techniques employed, and the contingent nature of business interruption expenses—the company said its actual losses could grow if its reinsurers fail to meet their obligations or if its reinsurance protections are exhausted or otherwise unavailable.
HAMILTON, Bermuda—Alterra Capital Holdings Ltd. said Wednesday that it has established a sidecar vehicle with up to $200 million in capital to provide property catastrophe reinsurance capacity in the wake the recent string of catastrophe losses.