UPDATE 1-Arch Capital sees Q3 losses from hurricanes
(Recasts; adds details)
Sept 29 (Reuters) - Reinsurer Arch Capital Group Ltd (ACGL.O: Cotización) said it expects the effects of Hurricanes Gustav and Ike to hurt its pre-tax earnings in the third quarter by $105 million to $180 million.
According to the company's preliminary estimate, it expects a net loss of $90 million to $150 million from Hurricane Ike and $15 million to $30 million from Hurricane Gustav.
Arch Capital expects its tax rate to be hurt as the number of claims go up and said losses from the storms are currently estimated at 70 percent in its reinsurance operations, with the rest arising at its insurance operations.
Arch Capital said the estimates are based on industry insured losses of $8 billion to $12 billion from Hurricane Ike and $2.5 billion to $4.5 billion from Gustav.
The company also said it held fixed-income securities issued by Lehman Brothers Holdings Inc of $26.3 million as of June 30, but had no direct exposure to American International Group Inc's (AIG.N: Cotización) securities.
However, the company said it had held $16.9 million in fixed-income securities of AIG's units as of June 30.
Shares of the Bermuda-based company were down more than a percent at $71.98 Monday on Nasdaq. (Reporting by Anurag Kotoky in Bangalore; Editing by Anil D'Silva)
© Thomson Reuters 2017 All rights reserved.