Zurich Financial Services provides estimate of tsunami claims and revises hurricane claims estimate
Zurich, February 7, 2005 - Zurich Financial Services Group (Zurich)* expects claims related to the tsunami that struck South Asia on December 26, 2004 to cost approximately USD 65 million after tax and net of reinsurance. The aggregate amount of expected claims net of reinsurance and before tax is approximately USD 90 million. These are best estimates based on exposure estimates and claim projections.
Separately, Zurich has revised its estimate of expected claim costs arising from the four hurricanes that struck the Caribbean and the United States in August and September from USD 400 million to USD 520 million after tax and net of reinsurance. The corresponding estimate for claims before taxes and net of reinsurance was revised from USD 525 million to USD 700 million. These revisions arise from the difficulty of modeling the unusual sequence of storms, striking the same area more than once and causing flooding losses in addition to wind damage. The adverse developments were amplified by the unprecedented reconstruction demand surge pushing up repair costs and the length of time of business interruptions due to the sequence of overlapping storms and the combined impact of wind and flooding that was a particular characteristic of hurricanes Frances and Ivan.
Zurich estimates that the tsunami claims and the increment in hurricane losses will impact net income in the fourth quarter 2004 by USD 185 million. These charges will not materially affect the Group's financial strength.