October 5, 2012

Allied World estimates $40M in drought losses

Swiss reinsurer Allied World Assurance Co. Holdings AG, which has Farmington operations, said it expects to record about $40 million in crop reinsurance related losses in the third quarter as a result of the severe drought conditions in the Midwest United States, Reuters reports.

Allied World also expects to record between $5 million and $10 million in losses and loss expenses in the quarter related to Hurricane Isaac, which struck the Gulf Coast of the United States in late August.

Analysts are expecting the Switzerland-based reinsurer to post $56.7 million, or $1.61 per share in operating profit in the third quarter, according to Thomson Reuters I/B/E/S.

Disaster modeler AIR Worldwide has pegged total crop insurance losses due to the drought at up to $20 billion.

Two of the largest crop insurers in the United States ACE Ltd and Wells Fargo's RCIS said in July that they were expecting modest losses related to the drought.

Allied World is scheduled to report third-quarter results on Oct. 31.

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