Lancashire makes more provisions for disasters

Insurance underwriter Lancashire Holdings said that it has increased its estimated losses resulting from the floods in Thailand and the Tohoku earthquake in Japan.

Lancashire's estimated loss in the fourth quarter of 2011 to the floods in Thailand, after reinsurance and reinstatement premiums, has been set at between $24m and $28m. The company said it has no direct exposure to Thai flood losses emanating from the Japanese reinsurance treaty products, including the Japanese Interests Abroad placements.

Lancashire said that the estimate of the losses relating to the floods is not a final figure, and the actual ultimate loss may be different.

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As for the estimated exposure to the Tohoku earthquake this has been upped by $42.2m to a net loss estimate of $117.3m, as flagged at the time of the company's third quarter update. This is after a reinstatement premium. The increase in reserves is mostly related to the company's exposure to one significant reinsurer, and the company has now reserved in full its remaining exposure to that client. Significant uncertainty remains on the eventual ultimate industry loss in relation to this event, Lancashire revealed.

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