Catastrophes Rip Into Bermuda Reinsurers’ Q4 Income

NU Online News Service, Feb. 9 3:11 p.m. EST

Catastrophe losses from the 2011 fourth quarter and prior quarters significantly weighed on earnings for threeBermudaspecialty insurance and reinsurance companies.

Everest Re Group reports an 86 percent drop in fourth-quarter earnings and the company posted an $80.5 million loss for the year.

Fourth-quarter net income was $41 million compared to $302.5 million during the 2010 fourth quarter.

Results include $370.7 million in catastrophe losses, pre-tax and net of reinstatement premiums, which includes $218 million in losses from the flooding inThailand, Hamilton, Bermuda-based Everest Re says.

The catastrophe-loss total also includes increased loss estimates from earthquakes inJapanandNew Zealandearlier in 2011 and $50 in additional catastrophe reserving.

Meanwhile, Pembroke, Bermuda-based Axis Capital Holdings says fourth-quarter net income dropped about 70 percent to $80 million. For the year net income was $9 million compared to $820 million for 2010.

Axis predicts $64 million in pre-tax losses from the Thai flooding and a $75 million increase in loss estimates for other catastrophes throughout 2011.

Alterra Capital Holdings reports net income of $30.9 million, down about 49 percent from $79.7 million for the 2010 fourth quarter.

Alterra says it recorded $55.5 million in catastrophe losses, pre-tax. About $30 million was due to fourth-quarter events and the balance is attributable to events from the first nine months of 2011.

However, premiums are up. Everest Re says gross written premiums during the fourth quarter increased 10 percent.

Gross premiums written during the last quarter of 2011 increased 5 percent at Axis Capital but John Charman, president and chief executive, says in a statement that the market turn “may require a few years to regain the pricing eroded over the last five or six.”