Everest Re Puts NZ Quake Losses at $140-$210 Million; CEO Comments on Japan

The Bermuda-based Everest Re Group announced that its preliminary loss estimate for exposures relating to the earthquake that occurred near Christchurch, New Zealand in February is “in the range of $140 million to $210 million,” pre-tax and net of reinstatement premiums. On an after-tax basis, the Company said it “estimates this loss to be between $120 million and $180 million.”

The estimates are based on “underwriters’ preliminary analyses and judgments, profiling of exposed limits, and modeled loss estimates that are consistent with an industry loss event ranging between $8 billion and $12 billion,” the bulletin explained. “It is expected that it will be several months before relative clarity emerges with respect to its ceding companies’ underlying losses, therefore the Company may adjust these estimates as new information emerges.”

Everest Re also reaffirmed its previous statement that it “expects gross losses of $45 million in the first quarter due to storms and flooding across Australia, which on a net after-tax basis would amount to approximately $37 million. Losses arising from Cyclone Yasi are expected to be relatively immaterial.”

Chairman and CEO Joseph V. Taranto made the following comment regarding the earthquake and tsunami catastrophe in Japan: “Our thoughts and sympathies are with the people of Japan as they deal with these tragic events. We have long relationships in the Japanese market and remain committed to providing our support during this most difficult time.”

He added that “while we expect this loss to be significant, it is still too early to provide a reasonable or reliable estimate considering the fluidity of the situation. Nonetheless, given the strength of our balance sheet and our core earnings, we have ample capacity to withstand the events that occurred during the first quarter and to continue to support our clients.”

Source: Everest Re