Zurich Estimates UK June Flood Losses at $400 million

Zurich Financial Services Group announced that, according to its current “best estimate,” it expects that aggregate claims payments related to storms and floods that occurred in the UK during June 2007 will not exceed $400 million before tax.

Zurich noted that the “estimate is net of reinsurance. The period of extreme weather was from June 14 to the end of June with a peak loss suffered in the Sheffield, Doncaster and Hull areas on June 25. Charges will be recorded in the half year results 2007, which are due to be released on August 16, 2007.”

According to the most recent estimates from Risk Management Solutions (RMS) the total cost of the floods could be as high as £3.25 billion ($6.55 billion). See also IJ web site July 30.

Zurich’s announcement cautioned that although the $400 million “represents our best estimate of the ultimate cost for these events, the nature of many of the losses and the extended remediation period needed to dry out properties and to complete repairs means that some uncertainty as to the final cost remains.”

The Company also indicated that further flooding in Southern England in July 2007 constituted an “additional significant loss event, but at this stage it is too early to provide an estimate of the claims cost to be expected for Zurich. A charge for the July floods will be recorded in the third quarter results.”

Source: Zurich – www.zurich.com