Hardy Underwriting Bermuda Ltd has estimated a total net loss of between £9 million and £12 million from last month’s Japanese earthquake and tsunami.The Bermuda-based re/insurer said the losses would come from its property treaty portfolio and predicted industry losses of around £21.5 billion.Rating agency AM Best has withdrawn its rating for Hardy and its subsidiaries at the company’s requestBut Hardy maintained it was still a strong supporter of the Japanese reinsurance market having established a number of important relationships there over the past few years.Shore Capital analyst Eamonn Flanagan said: “This figure is much less than we had feared and I believe the shares should respond favourably this morning.”Hardy chairman David Mann said: “Our thoughts are with those who are suffering as a result of recent catastrophes, and I intend to join the Hardy underwriting team visiting Japan in June in order to gain a more complete understanding of the position and to demonstrate our commitment to this important market.“The world certainly seems to be a riskier place at the moment, and this creates both opportunities and threats to our industry.”Hardy Syndicate 382 had been assigned a financial strength rating of A and an issuer credit rating of a+ and holding company Hardy Underwriting Bermuda and management company Hardy Underwriting Agencies was assigned a bbb issuer credit rating by Best, all with a stable outlook concurrently with withdrawing them.According to the ratings agency, Hardy Bermuda was expected to maintain solid risk-adjusted capitalisation despite the planned share buy-back of up to 2.7 million common shares that was announced in December 2010 and above average catastrophe losses in the first quarter of 2011.Hardy said there were several factors to take into account in assessing the potential losses including insured losses from more rural areas that have been most affected being significantly less than the disaster scenarios than the Tokyo area, the fact that Hardy had tended to position itself on the higher layers of programmes and had bought second event reinsurance protection at a relatively low attachment point for 2011 and also had substantial quota share cover, thus the reinsurance programme going forward provided greater protection than was available in 2010.The re/insurance company said that while its Kyosai book of insurance included homeowners’ business, it only provided contents cover and did not include earthquake shock or a tsunami, with the impact of “fire following quake” on the book not expected to be material, while its marine and aviation accounts were unlikely to have any material losses, and the specialty lines division did not have significant exposure to personal accident cover in the affected areas.Meanwhile its direct and facultative property account had low exposure to the affected region and losses were not expected to be significant, however a conservative reserve had been included in the total loss estimate.The group’s earnings, which are driven by the performance of syndicate 382, deteriorated last year, largely due to a net loss of £37.2 million attributable to the Chilean and New Zealand earthquakes and the hailstorms in Australia.The catastrophe losses emanated primarily from the property treaty account, which focuses on non-US business. Strong underwriting performance from the group’s non-catastrophe-exposed accounts supported a pre-tax profit of £10 million (2009: £20.1 million).