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.