SCOR’s Preliminary Quake, Storm Loss Estimates Around $130 Million
French reinsurer SCOR Group announced that based on preliminary estimates, it expects its related costs from the earthquake in Chile and Windstorm Xynthia to be approximately €95 million ($130 million) net pre-tax, which “represents approximately 3 percent of the projected annual net earned premiums of SCOR Global P&C, i.e. about half of the annual cat budget,” said the bulletin.
SCOR noted, however, that with regard to the earhtquake in Chile, there is a “strong component of uncertainty at play: approximately half of the losses are estimated to come from SCOR treaty business, with expected market losses ranging between $5.5 billion and $8.5 billion. The rest of the losses relates to the facultative book and contains a higher degree of uncertainty.”
The bulletin also pointed out that the first quarter of 2010 has so far “registered an unusually high frequency of severe natural catastrophe events, as two major earthquakes struck the American continent in January and February and a violent windstorm crossed Europe.
SCOR explained that its “mission” in the regular course of its business is “to provide protection for such losses, and the financial impact, though significant on a quarterly basis, will have no material impact on SCOR’s financial strength or solvency position.”
In addition to the earthquake in Chile, the fifth strongest recorded since 1900, and Xynthia, SCOR also posted losses from the earthquake in Haiti. The quake “caused more than 230,000 fatalities and 300,000 casualties, and destroyed thousands of public and private buildings, including medical facilities, and damaged the country’s infrastructure and communications network,” said the bulletin. “SCOR’s initial estimate for the claims relating to this event is
approximately €27 million [$37 million] net pre-tax.”
Windstorm Xynthia, which blew across Europe over the weekend of February 27-28, caused damage in Portugal, France, Spain, Germany, Belgium, the Netherlands and Luxembourg.
“The west coast of France was hit particularly hard,” SCOR noted. “Wind gusts of over 200km/h [125 mph] and storm surge floods caused severe material damage and 52 fatalities, prompting the French government to declare the storm a “natural disaster”, which triggered state support through the CCR” – the Caisse Central de Reassurance, which covers all large losses incurred on defined uninsurable risks written in France and overseas.
SCOR said that, based on initial estimates, it expects the claims relating to Xynthia to amount to “approximately €35 million [$48 million] net pre-tax, based on estimated market losses of €2.5 to € 3.0 billion [$3.42 to $4.1 billion] concentrated in France and Germany.”
Source: SCOR Group: www.scor.com