Lloyd’s Chaucer Lowers NZ Quake, Aus. Flood Loss Estimates; Assessing Japan

Chaucer Holdings PLC, the specialist Lloyd’s insurance group, has announced that it has reduced its best estimate for claims arising from the 2010 New Zealand earthquake and Australian floods.

Chaucer previously reported that its combined estimated total loss from these events would be approximately £24 million [$38.74 million]. However, following further assessment, the Company has updated this estimate to £17 million [$27.44 million], a reduction of approximately £7 million [$11.3 million].

The Company also gave an initial preliminary loss estimate, based on an assumed industry loss of NZ$12 billion [app.US$ 8 billion], of approximately £19 million [$30.66 million] for the 22 February 2011 Christchurch, New Zealand earthquake and £8 million [$12.9 million] for the January 2011 Australian floods.

These loss estimates are net of reinstatement premiums and reinsurance.

In an earlier bulletin Chaucer confirmed that its “specialist Nuclear Syndicate 1176 is one of a panel of insurers that provide coverage to Tokyo Electric Power Company (“the Operator”), the owner of two of the three nuclear sites in the proximity of the affected area – Fukushima Dai-ichi and Fukushima Daini.

Chaucer said it is “currently assessing its exposure to the recent earthquake and tsunami in Japan on 11 March 2011. However, it is currently too early to provide a loss estimate and the Company will provide a further update in due course.”

The earlier announcement stated that the Company “has no coverage in place for property damage or business interruption at these two plants. At the third plant, Onagawa, owned by Tohuku Electric Power Company (“the Operator”), coverage for property damage is provided, but the perils of earthquake and tsunami are specifically excluded.”

It added that “under the Japanese Nuclear Act of 1961 (and amended in 2009) the Operators are not liable for any damage arising from a “grave natural disaster of an exceptional nature. Consequently, Chaucer does not expect any significant insured loss to arise in respect of this event insofar as it is relevant to Syndicate 1176.”

Source: Chaucer