Flagstone estimates Japan losses up to $130m – The Royal Gazette | Bermuda News, Business, Sports, Events, & Community

Log In

Reset Password

Flagstone estimates Japan losses up to $130m

Flagstone Reinsurance Holdings S.A. has estimated losses of up to $130 million from the earthquake and tsunami that devastated Japan this month.

The Luxembourg-based company, which has underwriting operations in Bermuda, announced a preliminary loss estimate of $80 million to $130 million on its website earlier today.

The company's projection is based on an estimated industry loss of between $25 billion and $35 billion.

It comes on top of Flagstone's estimated losses of $60 million to $90 million arising from last month's New Zealand earthquake.

David Brown, Flagstone CEO, said: “Flagstone's retrocession strategy has been to buy protection for both extreme single events and for an accumulation of events during an underwriting year. As a result of this strategy, Flagstone has existing retrocessional protection that is effective in reducing our net exposure to both the Japanese and New Zealand losses, particularly at the higher end of our ranges.

“In addition, that protection is now effectively on a ‘next event' basis, providing Flagstone with substantial protection against further events in 2011.”

He continued: “Due to the frequency of events so far in 2011, and as a result of current protection and reinsurance triggered by the previous events, Flagstone's risk profile has been significantly reduced since December 31, 2010, from $272 million net event probable maximum loss (PML) to $162 million at the one in 100 return period, and from $326 million net to $204 million net event PML at the one in 250 return period.

“As a result of Flagstone's strong existing capital base and the substantial retrocessional protection already in place, we continue to maintain our solid financial position and a significant capital margin relative to the AM Best ‘A-' rating. As the year progresses, we look forward to serving our clients' needs and continuing to provide quality reinsurance capacity to the market.”

You must be Registered or to post comment or to vote.

Published March 30, 2011 at 3:30 pm (Updated March 30, 2011 at 3:29 pm)

Flagstone estimates Japan losses up to $130m

What you
Need to
1. For a smooth experience with our commenting system we recommend that you use Internet Explorer 10 or higher, Firefox or Chrome Browsers. Additionally please clear both your browser's cache and cookies - How do I clear my cache and cookies?
2. Please respect the use of this community forum and its users.
3. Any poster that insults, threatens or verbally abuses another member, uses defamatory language, or deliberately disrupts discussions will be banned.
4. Users who violate the Terms of Service or any commenting rules will be banned.
5. Please stay on topic. "Trolling" to incite emotional responses and disrupt conversations will be deleted.
6. To understand further what is and isn't allowed and the actions we may take, please read our Terms of Service
7. To report breaches of the Terms of Service use the flag icon