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Oct 2 (Reuters) - Lloyd’s of London underwriter Hiscox Ltd estimated on Monday that it would face net claims totalling about $225 million from Harvey and Irma, as insurers and reinsurers count the cost of the hurricanes.
The company said that despite continuing uncertainty around the losses from Harvey and Irma, the estimates were within its modelled range of claims for events of this nature and that it still had “depth of cover” in its reinsurance business.
Hiscox had previously estimated that it would see net claims of about $150 million from Hurricane Harvey.
Harvey lashed Texas causing flooding that put it on the scale of Hurricane Sandy in 2012 and Irma, one of the most powerful Atlantic storms on record, ravaged several islands in the northern Caribbean, before moving into Florida’s Gulf Coast.
The Lloyd’s of London insurance market has forecast that it expects net losses for the market of $4.5 billion from the two hurricanes.
Hiscox Chief Executive Bronek Masojada said the storms meant insurance and reinsurance rates were on an uptrend, impacting rates in affected areas and specific sectors.
“After a number of years of rate reductions, we are starting to see price corrections, most acutely in affected lines such as large property insurance and catastrophe reinsurance, which we expect to spread to non-affected lines,” he said.
Industry experts have said that some big reinsurers could be tipped into the red this year, following Hurricane Maria, the third major hurricane of the past few weeks, which caused an island-wide power outage in Puerto Rico.
The outage will mean a surge in insurance claims for lost business income that will increase the already high cost of damage caused by Maria.
Last week, rival Lloyd’s insurer Beazley said it reckoned that its losses from hurricanes Harvey, Irma and Maria in the Caribbean and southern United States and a series of earthquakes in Mexico would reduce its 2017 earnings by about $150 million.
Hiscox is set to publish its third-quarter interim trading statement on November 7. (Reporting by Esha Vaish in Bengaluru; editing by Carolyn Cohn)