Flagstone Reinsurance Holdings S.A. has estimated losses of up to $130 million from the earthquake and tsunami that devastated Japan this month.The Luxembourg-based company, which has underwriting operations in Bermuda, announced a preliminary loss estimate of $80 million to $130 million on its website earlier today.The company’s projection is based on an estimated industry loss of between $25 billion and $35 billion.It comes on top of Flagstone’s estimated losses of $60 million to $90 million arising from last month’s New Zealand earthquake.David Brown, Flagstone CEO, said: “Flagstone’s retrocession strategy has been to buy protection for both extreme single events and for an accumulation of events during an underwriting year. As a result of this strategy, Flagstone has existing retrocessional protection that is effective in reducing our net exposure to both the Japanese and New Zealand losses, particularly at the higher end of our ranges.“In addition, that protection is now effectively on a ‘next event’ basis, providing Flagstone with substantial protection against further events in 2011.”He continued: “Due to the frequency of events so far in 2011, and as a result of current protection and reinsurance triggered by the previous events, Flagstone’s risk profile has been significantly reduced since December 31, 2010, from $272 million net event probable maximum loss (PML) to $162 million at the one in 100 return period, and from $326 million net to $204 million net event PML at the one in 250 return period.“As a result of Flagstone’s strong existing capital base and the substantial retrocessional protection already in place, we continue to maintain our solid financial position and a significant capital margin relative to the AM Best ‘A-’ rating. As the year progresses, we look forward to serving our clients’ needs and continuing to provide quality reinsurance capacity to the market.”