National Underwriter - April 18 2011

As Quake-Loss Estimates Roll In,
Some See Improved Pricing

BY PHIL GUSMAN

AS MorE CoMpAniES report esti- mated losses for the March 11 Japan earthquake and tsunami, a couple of Bermuda executives say that a market turn is beginning to occur.

Everest re Group says it expects losses from the event to be about $320 million, assuming a $25 billion industry loss.

Aspen insurance Holdings says its losses will be approximately $160 million, assuming a $30 billion industry loss. the company said the loss represents 5 percent of shareholders’ equity as at Dec. 31, 2010.

Speaking to the event’s impact on the market cycle, Aspen CEo Chris o’Kane says the quake and other first-quarter catastrophes, combined with low investment returns and the change in exposure modeling from rMS’s latest release, will combine to improve pricing for catastro-phe-exposed property lines. “up to 35 percent of our 2011 business could consequently be subject to meaningful positive

Japan Earthquake & Tsunami Initial Loss Estimates, By Company

$320M

$160M

$100M*

Everest Re Group
Aspen Insurance Holdings
Alterra Capital Holdings

$75M

Allied World Assurance

*Estimated losses provided in a range up to this number

price changes,” o’Kane says.

Everest re Chairman and CEo Joseph
V. taranto echoes those comments, stat-
ing, “Given the frequency and severity of
recent events, we expect market pricing to
firm worldwide for property-catastrophe
capacity.”
Among other companies discussing the
impact of the Japan quake, Alterra Capital
Holdings says it expects losses of between
$60 million and $100 million for the event,
assuming industry losses of between $20
billion and $35 billion. the loss would repre-
sent between 2.1 percent and 3. 4 percent of
Alterra’s 2011 opening shareholders’ equity,
which the company says is within its nor-
mal risk tolerances for natural-catastrophe
events in the region.

Japan Earthquake Halts Softening In Energy Market

BY MARK E. RUQUET

THE EArtHQuAKE in Japan and two ther major losses for insurers have put he brakes at least for now on the soft-market pricing trend in the energy-insurance market, says a report from Willis Group.

According to the Willis Energy Market review, released during the firm’s north American Energy Conference in San Antonio, texas, insurers are reassessing their positions and taking stock of the losses they have endured during the first quarter of this year.

“Any softening dynamic on risks not
already quoted has been brought to an
end…” the report says. However, it cau-
tions that due to abundant capacity among
upstream (stock-owned companies) and
downstream (mutual companies) insurers,
soft-market competitive pressures could
resurface later in the year.