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Lancashire signals up to $212m losses from recent hurricanes, earthquakes

By Josh White

Date: Monday 09 Oct 2017

Lancashire signals up to $212m losses from recent hurricanes, earthquakes

(ShareCast News) - Lancashire Holdings announced its range for its estimated net ultimate losses arising from hurricanes Harvey, Irma and Maria and the two recent earthquake loss events in Mexico on Monday.
The FTSE 250 firm said the aggregate estimated net ultimate losses for the events was expected to be in a range of $106m to $212m after anticipated recoveries from its outwards reinsurance programme, and the impact of outwards and inwards reinstatement premiums.

It said that estimate fell "well within" its modelled loss ranges for such types of catastrophe events.

The loss estimate included Lancashire's exposures through its Bermuda, UK and Lloyd's operations, and in respect of the company's participation within the Kinesis third party capital facility.

Lancashire said it has exposure to hurricane risk impacting the US and the Caribbean in a number of classes; namely property retrocession, property direct and facultative, property reinsurance, cargo, marine and energy.

Lancashire's preliminary estimates for the loss events noted had been derived from a combination of market data and assumptions, a limited number of provisional loss advices, limited client loss data and modelled loss projections.

As additional information emerges, the company's actual ultimate loss could vary - perhaps materially - from the preliminary estimates announced, its board cautioned.

The final settlement of all claims was likely to take place over a considerable period of time.

"The extensive news coverage turned our thoughts to those whose lives, livelihoods and businesses were devastated by these forces of nature," said group chief executive Alex Maloney.

"As we assess the financial impact of these losses for Lancashire, these events illustrate the value of our products to our clients.

"Lancashire's combination of a strong balance sheet and market leading professional expertise allows us to service the current and future needs of our clients and their brokers and to meet the long term expectations of our investors and broader stakeholders."

Lancashire said it expected to provide an update as part of its earnings release covering the group's financial statements for the third quarter due for release on 2 November.

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