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Hurricanes Katrina and Rita

A number of you have asked about the impact of Hurricanes Katrina and Rita on AEGIS members and on AEGIS itself. As you know, a number of our member companies sustained significant losses to offshore platforms in the Gulf of Mexico, T&D systems and other utility plant and equipment. Although it is still too early to calculate these losses and their affect on AEGIS with reliable accuracy, overall, we believe the Company will sustain significant but manageable hurricane-related losses.

As most of you know, our property facility in New Jersey focuses primarily on electric generation and gas utility facilities and does not normally insure offshore operations or T&D. AEGIS London participates on placements for a number of offshore facilities in the Gulf of Mexico in addition to the property programs for AEGIS’s utility members. We have run RMS modeling on our Katrina and Rita exposures and we have been in direct contact with members known to have been affected. At this time, our preliminary estimate for our total net property losses from our consolidated operations is approximately $75 million for the two hurricanes. Losses of this magnitude fall within the possibilities we’ve envisioned for severe natural disasters and are contained by our per risk and catastrophe reinsurance programs. On the excess liability side, we believe the losses will be minor.