GENERAL ACCIDENT, the leading British insurer, said yesterday that insurance claims arising from Hurricane Andrew could 'cost it as much as Dollars 40m.' Lord Airlie, the chairman who was addressing an extraordinary shareholders' meeting, said: 'On the basis of emerging information, General Accident advise that the losses to their US operations arising from Hurricane Andrew, which struck Florida and Louisiana, might in total reach the level at which external catastrophe reinsurance covers would become exposed'. What this means is that GA is able to pass on its losses to external reinsurers once a certain claims threshold has been breached. It believes this threshold may be breached in respect of Hurricane Andrew claims. However, if this happens, it would suffer a post-tax loss of Dollars 40m (Pounds 20m). Mr Nelson Robertson, GA's chief general manager, explained later that the company has a 1/2 per cent share of the Florida market. It has a branch in Orlando. The company's loss adjusters are in the area trying to estimate the losses. Their guess is that losses to be faced by all insurers may total more than Dollars 8bn. Not all damaged property in the area is insured and there have been estimates that the storm caused more than Dollars 20bn of damage. However, other insurers have estimated that losses could be as low as Dollars 1bn in total. Mr Robertson said: 'No one knows at this time what the exact loss is'.
General Accident, the leading British insurer, estimates that its claims resulting from Hurricane Andrew could be as much as $40M. It could reach a level at which external catastrophe reinsurance covers would become exposed, meaning that GA could pass on its losses to external reinsurers. Losses to all insurers could total more than $8B. Not all property damaged in the path of Andrew is insured and estimates for total damage could go to $20B, but some estimates peg the insurers losses as low as $1B.