Validus Holdings yesterday announced that it expects losses of $185 million from Hurricanes Ike and Gustav to negatively affect its third quarter of 2008.

Validus chairman and CEO Ed Noonan said the company believes estimated losses to date in the industry for Ike have been understated.

"Regarding Hurricane Ike, we believe that currently reported industry loss estimates in the $8 billion-$12 billion range significantly underestimate the likely insured cost of this storm," he said. "Although Ike was a category two storm on the Saffir-Simpson Hurricane Scale at landfall, we believe the large wind field and the storm's high integrated kinetic energy, combined with wind damage through the Ohio Valley are not fully contemplated in current industry estimates.

"In addition, our view of the loss to the offshore energy markets caused by Hurricane Ike lead us to conclude that currently reported industry estimates for this segment are likely to increase."

Mr. Noonan said, based on Validus estimates, industry losses from Ike should fall in the $15 billion to $17 billion range — with $13 billion to $15 billion in onshore losses and another $2 billion to $3 billion in losses from offshore energy.

Through its two Bermuda-based subsidiaries — Validus Re and Talbot Holdings — the company is expecting $139 million and $26 million in Ike losses respectively. Losses resulting from Hurricane Gustav are expected to total $20 million — $13 million for Validus Re and $7 million for Talbot.

Other Bermuda insurers facing losses from Ike and Gustav include Ace, Axis, XL, Everest Re, Endurance, Montpelier Re, Arch and Platinum.

Validus' loss estimates are net of reinstatement premiums, reinsurance and other recoveries. The loss estimates are based on Validus' evaluation of impacted contracts and information provided by customers and intermediaries. Validus' actual losses from these events may vary materially from these estimates due to inherent uncertainties resulting from this preliminary information.

Validus Re's share price fell $3.49 (19 percent) in New York trading yesterday to close on $14.84.