Arch predicts 4Q Wilma losses of up to $60 million

Arch Capital Group Ltd. (NASDAQ: ACGL) predicts its after-tax earnings for the 2005 fourth quarter will take a US$40-million to $60-million hit because of Hurricane Wilma.The estimate is based on industry insured losses of $8 to $12 billion and is net of reinsurance and reinstatement premiums, the company says in a statement. If the industry loss is at the low end of the predicted scale, Arch says, the company’s losses would be split 56% in insurance operations and 44% in reinsurance operations. The insurance/reinsurance split will be more like 48/52 if the industry loss is at the upper end of the range, the company announced..”The estimates are based on currently available information derived from modeling techniques, industry assessments of exposure, preliminary claims information obtained from the company’s clients and brokers to date and a review of the company’s in-force contracts,” Arch announced.”The company’s actual losses from this event may vary materially from the estimates due to the inherent uncertainties in making such determinations resulting from several factors including the preliminary nature of the available information, the potential inaccuracies and inadequacies in the data provided by clients and brokers, the modeling techniques and the application of such techniques, the contingent nature of business interruption exposures, the effects of any resultant demand surge on claims activity and attendant coverage issues.”Actual losses may increase if the company’s reinsurers fail to meet their obligations to the company, Arch says, or the reinsurance protections purchased by the company are exhausted or are otherwise unavailable.Arch is a Bermuda-based company with $2.65 billion in capital. It provides insurance and reinsurance on a worldwide basis through its wholly owned subsidiaries.