Arch anticipates losses due to storms

Arch Capital Group Ltd. (NASDAQ: ACGL) recently announced that it expects its third-quarter earnings to be negatively impacted by the losses related to recent catastrophes.The Bermuda-based company estimates its losses from Hurricane Katrina will be $173 million) while Hurricane Rita is expected to reach losses of $48 million. Although less severe, the combined losses of $18 million from Hurricanes Dennis and Emily as well as the $13 million loss from the European floods are expected to influence the Company’s negative outlook. These estimates are net of tax benefits and reinsurance and also reflect the effects of expected reinstatement premiums, according to Arch.Approximately 64% of the third-quarter impact to operating earnings arises Arch notes that the size and complexity of Hurricane Katrina leaves room for substantial uncertainty regarding total covered losses and may further confound the assumptions underlying its loss estimates. Arch’s actual losses from all of these events may vary materially from the estimates due to the inherent uncertainties in making such determinations. In addition, actual losses may increase if its reinsurers fail to meet their obligations or their reinsurance protections are exhausted. Arch will release its 2005 third quarter results on October 27, 2005.