Canterbury quake to cost reinsurers US$6B, says Flagstone

Canterbury quake to cost offshore reinsurers US$6 bln, says Flagstone

By Paul McBeth

Dec. 31 (BusinessDesk) – The 7.1 magnitude Canterbury earthquake is set to cost reinsurers as much as US$6 billion, with the third firm in two weeks upgrading its estimated loss.

New York Stock Exchange-listed Flagstone Reinsurance Holdings is expecting to face claims worth US$75.5 million from the September disaster, compared to an earlier estimate of US$52.5 million. That makes them the third firm to lift the expected cost of the quake in two weeks after PartnerRe Ltd. lifted its forecast loss to be between US$140 million and US$160 million from an initial US$64 million, and Aspen Insurance Holdings flagged a cost of between US$20 million and US$53 million.

Flagstone also raised its estimated industry loss to US$6 billion from US$4.5 billion, which is more downbeat than other firms’ forecast cost to the industry.

That’s more pessimistic than the Reserve Bank’s latest estimated cost for the quake at NZ$5 billion, a NZ$1 billion upward revision from its first estimate.

Though the quake wiped out a big chunk of capital assets from the country’s ledger, its subsequent rebuild is expected to help underpin a rebound in economic growth through 2011.

(BusinessDesk)

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