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Categorized | Insurance

Three UK insurers face $380m bill on Sandy

Posted on December 18, 2012

Three listed Lloyd’s of London insurers have estimated they are facing combined losses of about $380m from superstorm Sandy but cautioned that the final hit they would take remained uncertain.

Catlin estimated it would endure net Sandy-related losses of about $200m, Hiscox claims about £90m and Novae says it would have costs of between $25m and $30m.

    The hurricane ravaged the eastern seaboard of the US, causing widespread flooding and severe damage to the homes, businesses and infrastructure that lay in its path.

    But even though seven weeks have passed since the storm, all three UK insurers cautioned they were still struggling to pinpoint exactly the size of the losses.

    Catastrophe analysts estimate Sandy will cost the insurance industry between $20bn and $25bn, which would make it the second-costliest storm on record – in absolute terms – after Hurricane Katrina in 2005.

    Shares in Catlin fell 3 per cent to 482.1p.

    Joy Ferneyhough, analyst at Espírito Santo Investment Bank, said Catlin’s estimated losses equated to 7.6 per cent of its tangible book value, after tax.

    This compared with 4.7 per cent for Novae, whose shares rallied 1.8 per cent to 376.25p.

    Hiscox shares fell 1.5 per cent to 461.9p.

    The Lloyd’s estimates comes a day after Zurich Insurance Group said it expected to face net claims of $700m.

    AIG has estimated that the storm would cause it post-tax net losses of about $1.3bn, while Swiss Re is expecting a pre-tax claims burden of about $900m.