(PRINTWORDS NEWS) The earthquake which struck New Zealand on September 4th might cause losses in insurance industry, as much as $6 billion, as said by Flagstone Reinsurance Holdings SA. Flagstone Reinsurance Holdings Ltd. raised its loss estimate from the 7.1-magnitude earthquake earlier this year itself in New Zealand to something around $75.5 million. They cited a revised industry estimate along with assumptions of damage caused to property. The cost could be at least $4.5 billion, as reported by Flagstone today in a statement issued by a leading news source. The company is re-raising funds for the losses incurred. Flagstone reported that its own losses from the earthquake might be $75.5 million. This is comparatively higher than the earlier estimate which was $52.5 million.
According to its website, this Luxembourg-based company was formed after reinsurance losses from hurricanes Wilma, Rita and Katrina. The earthquake that took place on September 4th, caused considerable damage to more than a million homes and sewage lines in and around New Zealandās second-largest city, Christchurch. The estimated cost of the damage are rising even today as claims pour in. The cost incurred by the disaster, which damaged over 500 buildings and houses in Christchurch city, would sum up to something between $4.5 billion and $6 billion in September. Reinsurance companies are therefore typically taking on the coverage of big and rare risks, like those of hurricanes, floods and earthquakes.
Last month, Flagstone reported that its third-quarter profit had dropped 45% on costs in relation to the New Zealand earthquake. Flagstoneās results of costs have gone down this year which included the earthquake of Chile as well as the explosion and sinking of an oil-drilling rig in the Gulf of Mexico in April.
