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Aspen more than doubles New Zealand quake loss estimate

Bermuda-based re/insurer Aspen Insurance Holdings Ltd yesterday has more than doubled its estimated losses from September’s earthquake in New Zealand.Based on new information Aspen said yesterday that the earthquake, which caused widespread damage on the South Island, in and around the city of Christchurch, will cause it pre-tax losses of $53 million, as opposed to its previous estimate of $20 million, equating to a $47 million post-tax loss.“Aspen’s current loss estimate is consistent with an industry loss of NZ$5.5 billion (US$4.1 billion) from the New Zealand earthquake,” the company’s statement said.“The upward revision reflects new information and is mainly due to one large domestic New Zealand cedant, which comprises approximately 81 percent of Aspen’s total loss estimate for this event.“Aspen’s initial estimate of a NZ$2.2 billion loss for this cedant included a margin for conservatism above the top end of the client’s original estimated range of NZ$1-2 billion. The latest information from this client indicates a substantial increase with a wide range of possible outcomes.“Given the continuing uncertainty associated with this loss, Aspen has now concluded that it is prudent to reserve at a total loss for Aspen’s shares on this programme, which assumes a loss of at least NZ$3.5 billion for this client. Aspen has also reserved at a total loss for all other domestic New Zealand placements. The balance of Aspen’s loss is $5 million and comprises shares on programs for clients domiciled outside of New Zealand which include some New Zealand exposure.”Earlier this week PartnerRe said its estimate for losses from the quake had also more than doubled.