European Reinsurers Suffered $2B In Storm Losses

NU Online News Service, Dec. 9, 3:53 p.m. EST?The North Atlantic hurricanes and Japanese typhoons during the 2004 third quarter cost major European reinsurers nearly $2 billion in aggregate losses, according to a report by British reinsurance broker Benfield Group.[@@]

The losses disclosed to date by the major European reinsurance groups in respect to the recent hurricanes and typhoons are as follows: Swiss Re, $750 million; Munich Re, $671 million; Hannover Re, $380 million; Converium, $96 million; Alea, $55 million; SCOR, $43 million.

Natural catastrophe losses, Benfield said, were the dominant feature of the third quarter, abruptly reversing what, for reinsurers, has been the unusually benign experience of the last several years. Reserve strengthening was again a feature.

The Benfield report pointed out that European reinsurers' earnings from non-catastrophe-exposed business remained "remarkably resilient." Catastrophes aside, underwriting results were generally favorable for the third quarter, but the catastrophe burden has placed some full-year combined ratio targets in doubt.

For the most part, premium income has fallen during 2004, a trend which has been evident at each quarter, Benfield said. This is partly explained by the weakness of the U.S. dollar against the Euro, with the nine-month daily average falling 9 percent year-on-year.

On the pricing front, Benfield noted there was general consensus that pricing and terms and conditions remain favorable for the most part.

The full report, titled "Benfield European Quarterly: 9M 2004 Riders on the Storm" can be found at www.benfieldgroup.com/research/reports.

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European Reinsurers Suffered $2B In Storm Losses

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