Bermuda-based reinsurer Validus Holdings Ltd. yesterday announced that it has increased its estimate of the net adverse effect from Hurricane Ike by around $70.1 million to a total $235.1 million.

Validus chairman and chief executive officer Ed Noonan said Ike was the third most costly windstorm in history and that losses had continued to escalate for the industry.

The increased estimate arises primarily from property catastrophe excess of loss reinsurance coverage provided to insurance companies with exposure in the continental US and to a lesser extent insurance companies with exposure to Gulf of Mexico offshore energy facilities.

Based on this revised information, Validus now estimates that industry losses from Hurricane Ike are in the range of $18 billion to $21.0 billion, an increase from earlier estimates of between $15 billion and $17 billion.

"As industry insured losses rise from Hurricane Ike, a disproportionate percent of the increase is borne by the reinsurance sector as more ceding companies attach excess reinsurance layers or trigger additional reinsurance recoveries from their catastrophe programmes," Mr. Noonan said in a statement last night.

"We now expect to make recoveries under the Validus Reinsurance retrocessional programme and have nearly exhausted our net retentions required before we begin to make recoveries from Talbot's property reinsurance coverage.

"Despite the losses associated with Hurricane Ike, we expect to report significant underwriting profits for the 2008 year as a result of our global diversification."