Markel Estimates $80 Million in Hurricane Losses

Richmond, Va.-based Markel Corporation announced that on the basis of currently available information its estimated pre-tax net losses, including reinstatement premiums, from Hurricanes Charley, Frances, Ivan and Jeanne are expected to total $80 million.

“This estimate of hurricane losses is based on claims received to date, industry loss estimates, output from industry and proprietary models and a review of in-force contracts,” said the bulletin. “Because it will be very difficult to determine actual losses for some time, we stress that this estimate is preliminary and based on broad assumptions about coverage, liability and reinsurance.”

The announcement also put the losses in perspective, pointing out that Markel’s second quarter pre-tax income was approximately $87 million. The company said it had released the estimates in advance of its third quarter earnings announcement, scheduled for October 27, “given the unusual accumulation of catastrophe events in the third quarter.

“These four events occurred within six weeks of each other and are currently estimated to produce total losses to the industry in excess of $20 billion,” said the bulletin. “Losses to Markel arise from many different product lines and business units including property (produced both from U.S. and international units), offshore rigs, watercraft and specialty reinsurance. Losses also arise from diverse locations including the Caribbean, the Gulf of Mexico, Florida, Alabama and other areas within the storm paths.”