Catastrophes Rip Into Bermuda Reinsurers’ Q4 Income

Catastrophe losses from Q4 2011 and prior quarters significantly weighed on earnings for three Bermuda specialty 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 2010's 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 in Thailand, says Hamilton, Bermuda-based Everest Re.

The catastrophe-loss total also includes increased loss estimates from earthquakes in Japan and New Zealand earlier in 2011 and $50 million 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 2010's 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, on a brighter note for these companies, premiums are up. Everest Re says gross-written premiums during the fourth quarter increased 10 percent.

Gross-written premiums during the last quarter of 2011 increased 5 percent at Axis Capital, but President/CEO John Charman says that the market turn “may require a few years to regain the pricing eroded over the last five or six.”