Zurich Insurance Sees $700 Million of Hurricane Sandy Claims
That includes $40 million related to Farmers Re in connection with the reinsurance provided to the Farmers Exchanges, the Zurich-based company said today in a statement. The claims will be booked in the insurer’s fourth-quarter results, which will be released on Feb. 14.
“The total Sandy loss burden is somewhat higher than we expected,” Stefan Schuermann, a Zurich-based analyst with Vontobel Holding AG who has a hold rating on the stock, said in a note to investors. That won’t prevent Zurich Insurance from paying a dividend of 17 Swiss francs ($18.53) per share from full-year earnings, he said.
Total market losses from the Hurricane Sandy, which made landfall in the U.S. on Oct. 29, could be as much as $25 billion, Zurich-based Swiss Re Ltd. (SREN) said last month. Before hitting the densely populated Northeast coast of the U.S., where a storm surge resulted in extensive flooding and damage to property, Sandy affected the Caribbean and the Bahamas.
Zurich Insurance fell 0.1 percent to 239.40 francs as of 9:22 a.m. in Swiss trading, paring this year’s gain to 13 percent and valuing the company a 35.5 billion francs.
Zurich Insurance Chief Executive Officer Martin Senn said on Nov. 29 that he was confident that the company’s cash flows and capital position will allow an “attractive and sustainable dividend.”
“This storm has shown us once again how powerful natural forces can be and what risks they pose,” Senn said today. “Zurich’s strong balance sheet, healthy cash flows and risk expertise enable us to be there for our customers when they need us and to deliver on our promise.”
Swiss Re, the world’s second-biggest reinsurer, estimated its claims burden at about $900 million.
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