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Tower Group International, L.Ş. Message Board

  • cash2go cash2go Sep 27, 2013 5:02 PM Flag

    Looking at Hurricane Sandy losses

    2006 A.M. Best

    Due to the group's concentration in New York City, Tower's capital position is highly exposed to both natural and man-made catastrophe losses. A.M. Best has stress-tested Tower's capitalization on a risk-adjusted basis. The group's capitalization withstood these stress-tests at current rating levels; however, A.M. Best will continue to monitor Tower's risk management and data aggregation practices due to the sensitivity of the group's capital base to catastrophe exposures.

    Jan 2013 Fitch says

    Models Miss Sandy Losses, Need Adjustment: Fitch

    Fitch adds that overall losses will fall within the high-end of loss estimates, reaching $20 billion and coming close to the $25 billion mark. It says companies have reported losses of approximately $16 billion to $17 billion ((so far)).

    * My guess, TWGP is seeing losses well out of expected range

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    • and yet Validus Holdings, Ltd and The Hanover Insurance Group are not warning. i do not see the doomsday scenario.

      • 2 Replies to cabogordon
      • this quote, before earnings delays, could be ominous:

        In the case of Tower, it sounds as though the insurer is increasingly willing to underwrite business in worker's comp (((and coastal P&C))). This is business that carries above-average risk, but both Chubb and Arch Capital have shown that when written properly, it's also potentially quite lucrative.

      • 1 in 700 year Hurricane, how do you model for that?

        TWGP pulled back from their original $60 to $110 million estimate and said in September :
        "and at this time is not providing any projections". Followed in a few weeks by Chief Underwriter Officer exiting the company.

        From what I've read the reinsurer would be hit if/as claims passed the $10 billion mark. Claims were nearing $25 billion. Fitch also said the insurers diversification would have been vital. Everyone knows TWGP is Northeast focused and mainly New York City.

        "and at this time is not providing any projections", couldn't the news about CUO resignation have come after Oct 7? TWGP should be more sensitive to their shareholders needs. Or, is it that bad?

    • more from Fitch report:

      Fitch says that most insurance-company losses are a manageable 7 percent or less of shareholder equity with an overall average of 3 percent. Only three companies were higher: Tower Group Inc. (8 percent), Validus Holdings, Ltd. (8.1 percent), and The Hanover Insurance Group, Inc. (8 percent).

      The rating service notes that all three companies grew by acquisitions in recent years, “resulting in increased exposure to Northeast U.S. catastrophe risk.”