28th Sep 2005 07:01
BRIT Insurance Holdings PLC28 September 2005 REGULATORY RELEASE 28 September 2005 FOR IMMEDIATE RELEASE Brit Insurance Holdings PLC Hurricane Katrina/New Orleans Flood and Rita estimates Brit Insurance Holdings PLC ("Brit" or "the Group"), the UK general insurer,announces a preliminary estimate of £145m for claims arising from HurricanesKatrina and Rita and the New Orleans Flood ("NOF"). This comprises £125m forKatrina/NOF and £20m for Rita, net of reinsurance recoveries and reinstatements,based on currently available information. Brit's claims are expected to ariseprimarily in its US direct property, reinsurance, retrocession and energyportfolios. Brit believes that the net impact of the above estimate from the two Hurricanes/NOF on 2005 pre tax profits will be approximately equivalent to Brit's pre-taxresult for the first six months of 2005 of £112m. The financial strength ratings of the Group's principal subsidiary, BritInsurance Limited, remain "A+" (Strong) with Fitch and "A" (Excellent) with A MBest, in each case with Stable Outlook. The Group has now had the opportunity to conduct extensive modelling onHurricane Katrina/NOF and a ground-up review of all exposed contracts and hasrecently received initial reports from its loss adjusters to complement thoseavailable from industry agencies. There remain significant complexities inestablishing a final cost of Hurricane Katrina/NOF, including the unprecedentedflooding, limited access by claims adjusters and the potential legal andregulatory issues, and the response of reinsurance policies. However this is ourbest estimate given currently available information. Hurricane Rita appears to be a less complex event and for this reason Brit isgiving a provisional estimate early. Dane Douetil, Chief Executive Officer, stated: "On 6 September we announced that it was too early to give a provisionalestimate of the impact of Hurricane Katrina/NOF. Now that some meaningful datais becoming available by zip code, the Group is in a position to provide aninitial estimate. We believe that the extraordinary flood element makes thislargest ever loss to the industry, although there is still some uncertainty asto how state and federal government will deal with this element of the loss. "We expect that the unprecedented industry losses arising from HurricanesKatrina/NOF and Rita, following on the 2004 hurricane losses, are likely to havea significant impact on pricing, especially in our energy, property, reinsuranceand retrocession businesses. Brit's strong balance sheet means that we are wellpositioned to take advantage of the opportunities that are likely to presentthemselves as a result. Meanwhile our UK business, which is becoming anincreasingly significant part of our overall underwriting, continues to developwell. We believe that 2006 will present significant opportunities for Brit tocontinue to develop its ever growing franchise." For Further information: Brit Insurance Holdings PLCDane Douetil 020 7984 8500 Haggie FinancialDavid Haggie/Peter Rigby 020 7417 8989 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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