Markel estimates losses of $503mn from Harvey, Irma, Maria, & Mexico quakes

American International Group Inc

American International Group Inc

Morgan Stanley analysts said the losses were slightly above their estimate of $2.5 billion, but were manageable as it equated to about 2.6 percent of book value.

Both insurers said the losses were within their expectations.

XL Group (NYSE:XL) +3.2% after-hours as the insurance and reinsurance company said it expected to total ~$1.48B in catastrophe losses in Q3, mostly from hurricanes Harvey, Maria and Irma.

Markel also said that its estimates are preliminary, and could be subject to change.

Hurricanes Harvey, Irma and Maria each contributed approximately 25 percent, 40 percent and 25 percent, respectively, to the company loss estimates, with 10 percent related to all other events in the quarter, most notably the Mexican earthquakes and Typhoon Hato. Those forecasts are net of reinsurance, but fall to US$1.9bn to US$2bn after tax.

AIG estimated the impact after taxes at $1.9 to $2.0 billion.

Hurricane season in the Atlantic is still in full swing and Morgan Stanley said it expects overall insured losses from this year's catastrophes to approach $100 billion.

The estimated losses are approximately evenly split between XL Group's insurance and reinsurance segments.

XL's CEO Mike McGavick said: "The problem of underinsurance is again laid bare, afflicting especially those already less well off".

Richmond, Virginia-based Markel, meanwhile, said it expects to report third-quarter pretax underwriting losses of $503 million, net of reinstatement premiums, from hurricanes Harvey, Irma and Maria as well as the Mexico City natural disaster.

Markel's estimate is preliminary and dependent on broad assumptions about coverage, liability and reinsurance.

Commenting on today's announcement, XL's Chief Executive Officer Mike McGavick said: "Our hearts break at the havoc caused by these events; the awful pain and anguish suffered".

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