Earthquake to cost Lancashire about $75m

21st Apr 2011 08:03

Insurance underwriter Lancashire Holdings, which has more than recovered from the share price tumble it suffered in the wake of the Japanese earthquake, said it expects to take a $75m hit from claims arising from the natural disaster.The estimate of the net impact from the Tohoku earthquake and subsequent tsunami is based on an industry loss of $25bn, plus Lancashire's own internal assessment and the limited amount of information received to date from brokers and clients. Lancashire's estimated loss represents 68% and 37% of its "1 in 100 year" and "1 in 250 year" Japan earthquake net probable maximum losses, respectively, based on its portfolio at the beginning of 2011.The company warned that the figure could still change quite a lot. In particular, the ultimate loss incurred by Japanese co-operative mutual companies could significantly affect the industry loss, and the ultimate loss incurred by Lancashire. ---jh