Losses mainly from Chile earthquake reinsurance claims
Aspen has announced a preliminary loss estimate of $m for the earthquake which struck off of the southern coast of Chile on February 27, 2010, European Windstorm Xynthia and the Australian hailstorms and floods.
Aspen's preliminary loss estimate for the Chilean earthquake is in the range of $70 million to $110 million, net of tax and reinstatement premiums. This loss is virtually all derived from Aspen's reinsurance operations with the Company's insurance business accounting for less than $0.5 million. Aspen's reinsurance exposure to this event mainly arises from the Company's international clients with worldwide operations, which include Chile.
Aspen's preliminary net after tax loss estimate for Windstorm Xynthia is less than $5 million, net of reinstatement premiums, with its reinsurance operations accounting for the entire loss.
The Company expects its exposure to the Australian hailstorms and floods to be negligible.
Chris O'Kane, Chief Executive Officer said, "We are deeply saddened by the tremendous human and economic losses caused by these natural catastrophes and are entirely committed to supporting our clients as they recover from the devastation. Aspen's diversified portfolio of insurance and reinsurance products responded as we had expected for events such as the Chilean earthquake, Windstorm Xynthia and the Australian hailstorms. This demonstrates the strength of our risk management framework and robust underwriting standards."
Firm market loss estimates for the Chilean earthquake and Windstorm Xynthia have yet to be determined and Aspen has received only a very limited number of definitive loss notifications from its reinsurance clients. However, Aspen's initial investigation and analysis to date suggest that total industry losses from the Chilean earthquake will be in the region of $5 billion to $8 billion. Aspen estimates that Windstorm Xynthia may result in a loss to the industry ranging from EUR1.25 billion to EUR2.5 billion. Aspen's company specific loss estimates are not developed solely on market losses and therefore would not change in direct correlation with any future increases or decreases to industry losses.
Aspen's estimated losses from each of those events are preliminary and involve the exercise of considerable judgment and reflect a combination of ground-up evaluations, information available to date from brokers, the application of Aspen's catastrophe modelling, industry losses, market intelligence, initial tentative loss reports and other sources. Consequently, the actual net impact on Aspen's results arising from these events may differ materially from the current estimate. Preliminary forecasts of losses relating to the earthquake and after-shocks in Chile, for the industry as a whole and for individual companies, are subject to significant uncertainty due to limited actual loss data. As additional loss information becomes available, we may revise this estimate.