Bermuda-based reinsurer Everest Re Group Ltd. (RE) has announced its estimate of April-May catastrophe losses (cat losses) based on property damages resulting from cataclysmic weather conditions.
Everest Re, as a property catastrophe writer, expects after-tax cat losses of $80 million from a series of severe storms that ravaged the U.S. in the months of April and May, along with the wildfires in Alberta, Canada. Everest Re stated that the estimates include updated provisions for first quarter cat loss of nearly $10 million on account of the New Zealand earthquake.
In the first quarter, Everest Re suffered total pre-tax cat losses of $665 million, with the Japanese Tsunami accounting for $400 million, New Zealand earthquake $200 million, Australian flood $55 million and Cyclone Yasi $10 million. However, net of tax and reinstatement premiums, the cat losses for this quarter totaled approximately $531 million or $9.77 per share.
Other insurers and reinsurers who suffered losses from the early 2011 catastrophe include companies like Allstate Corp. (ALL) and Travelers Companies Inc. (TRV). While Allstate expects net losses of $2.0 billion, Travelers anticipates April-May cat losses in the range of $1.0–$1.05 billion.
According to experts, the April-May cat losses would cost about $7.7–$12.5 billion to the industry. They believe the insurers overall have already incurred heavy cat loss, which is almost double the figure that was earlier predicted for full-year 2011. We expect the market to harden as severe natural disasters this year are pushing prices higher in the insurance industry after years of sharp price declines.
Everest Re will reveal all the details on catastrophe losses in its second quarter earnings report, which is scheduled for release on July 27, 2011, after the market closes.
