Aspen Insurance Holdings said that its initial estimate of losses expects to be of approximately $160m, post tax and net of reinstatement premiums, from the Tohoku Earthquake and the ensuing tsunami on 11 March 2011.
Aspen said that the estimate is consistent with an industry insured loss of $30bn. It is based on the company’s review of the market loss, the individual treaties and policies expected to be impacted and discussions with clients and brokers.
Given the magnitude and recent occurrence of these events, the insurer said that the there will be considerable uncertainty associated with this estimate and actual losses may differ materially.
Aspen Insurance CEO Chris O’Kane said that the Tohoku earthquake has contributed to an extremely active first quarter in terms of natural catastrophe events, and Aspen believes that it is important to highlight a positive change in trading conditions and market sentiment which took place in March.
"We had anticipated that rates for our property reinsurance account would reduce by between 5% and 10% in the April renewals whereas we have achieved average rate increases of 5%.
"This understates the improvement as approximately 40% of April renewal premium was quoted or completed prior to the Tohoku Earthquake.
"Furthermore, we are aware of 17 catastrophe programs where the placement had initially been quoted pre the Tohoku earthquake and, which had to be re-priced to secure completion.
"Our balance sheet remains strong and we believe that we are well positioned to benefit from an improved pricing environment," O’Kane said.