European Windstorm Kyrill will impact Bermuda reinsurers less than their European counterparts, according to an investment bank last week.

Bank of America securities analyst Tamara Kravec in a note to investors said the contrast will be starker when comparing the storm that struck the United Kingdom and the continent this month to the one that struck in 2005.

Ms. Kravec said Swiss Re's estimate of $180 million in losses would represent about 4 percent of the industry's estimated total of $4.5 billion, “while its losses from Erwin were negligible.”

Likewise, Munich Re reported estimated insured losses of about $780 million from Kyrill, or 9-to-12 percent of its forecasted total industry loss of up to $9.75 billion. The German reinsurer reported a loss of about $90 million, or 4 percent of industry loss, from Erwin.

On the flip side, Bermuda's Partner Re announced losses of up to $65 million that would amount to up to 1.4 percent of the industry's total, using Swiss Re's figures, versus 3.3 percent for the Erwin losses it incurred.

Ms. Kravec said one possible reason for the European companies taking a greater hit from Kyrill is that the 2007 storm's impact was felt more in continental Europe than Erwin's where Swiss Re and Munich Re have among the highest market shares.

Morgan Stanley analyst William Wilt in a note to investors raised some questions about the insured loss estimates from Kyrill, some of which reached EUR8 billion, or $10.3 billion.

“Eight billion is a lot of euros, and while we are not property experts, it seems to us a whole lot of 'stuff' would have to be destroyed before insured losses reached that level,” he wrote.

He said that the wide range of estimates from Benfield's low of EUR1.7 billion ($2.27 billion) to the AIR Worldwide estimate of EUR8 billion indicates that catastrophe modeling is not an exact science.

Mr. Wilt noted, “Sometimes every stakeholder in the reinsurance industry can benefit from stepping back and asking themselves 'does this really make sense?”

In related news, the French reinsurer SCOR estimated its losses from the storm at between $32 million and $39 million.

Special Reports /

Bermuda Goes Light On Kyrill

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