Bermuda-based Aspen Insurance Holdings Limited said today that its losses from recent hurricanes totaled $155 million and for the third quarter its alternative investments dropped by $41.3 million.
Estimates for industrywide losses from Hurricane Ike, Aspen said, have been too low and it expects them to be well above $15 billion.
The company also discussed its holding in bankrupt Lehman Brothers, and other troubled companies. It said its Lehman investment was $38 million as of Sept. 15 or less than 0.7 percent of its total investment portfolio.
Aspen said it has no American International Group stock and has less than $2 million in bonds issued by the troubled insurer's subsidiaries.
The firm said it has no investments in the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac) or Washington Mutual, Inc (WaMu), or any corporate debt issued by WaMu.
Aspen said it may have exposure to the securities of some of the financially challenged companies through investments in hedge funds which represented approximately 9 percent of its investment portfolio at June 30, when they were valued at $555.3 million.
Based on preliminary valuations received to date, the estimated returns on Aspen's alternative investments for the three months ended Sept. 30, are expected to be negative $41.3 million or negative 7.4 percent, reflecting monthly results of negative 2.1 percent in July, negative 0.6 percent in August and negative 4.7 percent in September.
On a year to date basis to Sept. 30, Aspen said estimated returns are expected to be negative $47.4 million, or negative 8.4 percent.
The company said its preliminary net after tax loss estimate for Hurricane Gustav is approximately $14 million, net of reinsurance and reinstatement premiums, and for Hurricane Ike approximately $141 million, with its reinsurance operations accounting for approximately 78 percent and 22 percent from its insurance segment.
Firm market loss estimates for Hurricane Ike have yet to be determined and the company said it has received only a very limited number of definitive loss advices from its reinsurance clients.
Aspen said its investigation and analysis to date suggest that total industry losses from Hurricane Ike will be in the region of $16 billion, comprised of approximately $3 billion off-shore and $13 billion on-shore, with approximately $11 billion of the on-shore losses arising from Texas.
Yesterday Validus, another Bermuda insurer said industry estimates of an $8 billion to $12 billion loss were too low and it expects it to be in a range of $15 billion to $17 billion.
Aspen's Chief Executive Officer, Chris O'Kane commented, "The most recent information we have received from clients, brokers and loss adjusters has reinforced our belief that industry losses from Hurricane Ike are likely to be more costly than the industry initially thought and this is reflected in our preliminary loss estimate for this event."
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.