Lloyd's insurer ups Hurricane Ike loss estimate from £15m to £42m, and ceases to write GOM offshore energy wind.
Advent, the specialist Lloyd's insurer, has updated its loss estimate for Hurricane Ike, and is ceasing to write Gulf of Mexico offshore energy business that has windstorm exposure.
Advent has increased its estimated losses, net of reinsurance recoveries and reinstatement premiums, for Hurricane Ike from £15 million before tax (the figure reported in its third quarter results) to a current estimate of £42 million before tax.
Advent's management has decided to cease to write any Gulf of Mexico offshore energy business which has windstorm exposure. "We believe that decisive action needs to take place in the energy market, and specifically to Gulf of Mexico windstorm exposures, in terms of coverage and policy wording, not simply increasing rates. Until such time that we see clear evidence that this is taking place, and not just on a short term basis, we will not expose the company to these risks," the company said.
The increase in the loss estimate primarily results from Syndicate 780's offshore energy account with an increase in estimated net losses of £22 million. Clients reported higher than expected losses (largely due to sub sea physical damage) leading to the exhaustion of its reinsurance protection.
The company said it is extremely disappointed by the performance of its Energy account leading to this significantly higher Hurricane Ike loss estimate. It expects to incur a loss for the year. Results for the year ended 31 December 2008 will be reported on the morning of 20 February.