CNA WTC Losses Put at $468 Million Pre-Tax

CNA’s most recent Form10-Q filing with the Securities and Exchange Commission put overall net pre-tax losses from the attacks on the World Trade Center at $468 million net of reinsurance; after tax losses are expected to be $304 million.

CNA said that the “loss estimate is based on a total industry loss of $50 billion and includes all lines of insurance.” It also indicated that the “estimate takes into account CNA’s substantial reinsurance agreements, including its catastrophe reinsurance program and corporate reinsurance programs.”

The Company noted that it has “closely monitored reported losses as well as the collection of reinsurance on WTC event claims. Based on experience to-date, the Company believes its recorded reserves are adequate.”

CNA’s filing showed that gross losses, before reinsurance payments, totaled $1.648 billion. The largest loss to the group was $662 million at CNA Re, which had a net pretax impact on the WTC estimates of $271 million, more than half of the loss estimates.

CNA told the SEC that it had earlier revised CNA Re’s estimates of premiums and losses related to the WTC event. “In estimating CNA Re’s WTC event losses, the Company performed a treaty-by-treaty analysis of exposure. The Company’s loss estimate was based on a number of assumptions including the loss to the industry, the loss to individual lines of business and the market share of CNA Re’s cedants,” said the company.

It further stated that “The impact of increasing the estimate of gross WTC event losses by $144 million was fully offset on a net of reinsurance basis (before the impact of the CCC Cover) by higher reinstatement premiums and a reduction of return premiums.”

Topics Profit Loss Reinsurance