ACE does "not expect any material losses" from the Asian tsunami disaster, according to president and CEO Evan Greenberg.

His statement yesterday confirms earlier forecasts by others in the sector and insurance analysts that the global insurance industry including those companies based in Bermuda will have minimal exposure to the disaster.

ACE was the first Bermuda-based insurer to speak to its exposure to last Sunday's 9.0 magnitude undersea earthquake in the Indian Ocean and the resulting tsunami.

In a brief statement, Mr. Greenberg said that if warranted he would provide an update as more information becomes available. In the meantime, he announced the creation of the ACE Tsunami Relief Fund, to which employees around the world can have their donations mated by by the company. The ACE Foundation will also make a "significant contribution to one or more relief organisations."

"The earthquake and resulting tsunamis that struck Southeast Asia are a human tragedy of monumental proportion. The unprecedented loss of life and catastrophic damage, combined with the millions left homeless and the threat of impending disease, make this event one of the worst natural disasters in modern history. All of us at ACE express our deepest sorrow over those who lost their lives ? or who lost loved ones ? and our hearts go out to so many people now in need who have been touched personally by this tragedy," Mr. Greenberg said.

More than 100,000 people have been reported dead and thousands have been injured after the tsunami flooded coastal areas in Bangladesh, India, Indonesia, Malaysia, the Maldives Island, Myanmar, Somalia, Sri Lanka and Thailand. Hundreds of thousands more people are missing and millions are homeless. Property damage to residential and commercial buildings is reported to be extensive however the Insurance Information Institute said: "Non-life (i.e. property/casualty) insurance penetration rates are low in the countries affected by this disaster. In other words, relatively little insurance is purchased in the affected countries," the III said in a report adding that in Indonesia just $8 per capita was spent on non-life insurance in 2003 whereas in the worst hit country Sri Lanka, penetration is just $7. This compares to the $1,980 per capita spent on non-life insurance in the US.

The III report issued yesterday said that foreign insurers operating in the region could experience some potentially large claims from hotel and resort properties as well as facilities owned and operated by foreign multinationals. It said however that it is is important to recognise that "large multinationals tend to have large retentions, often in addition to a captive insurer. Many have purchased high-level catastrophe coverage. Claims associated with damage to infrastructure, port facilities, marine interests (ships, cargo, oil platforms, offshore facetious are also possible. Travel personal accident and life insurers will also be impacted. Business interruption will also be a source of insured losses."

Analysts yesterday confirmed that while primary insurers of the region are based in Asia, reinsurers including those based in Bermuda are expected to incur some of the insured costs.

Donald Thorpe, senior director at Fitch Ratings told this newspaper: "A lot of Asian primary insurers are reinsured and that is a world-wide markets. They would likely, in addition to looking for reinsurance in Asia, also look to London and Bermuda as well as the rest of Europe."

Paul Newsome, vice president and senior insurance analyst at AG Edwards, said that among the companies he covers in the S&P 500 Bermuda-based reinsurers are the most likely to have exposure because of their sheer size and international scope.

"That is because the Bermuda-based insurers are the most global in their business," he said. "If you are comparing the business of Allstate which essentially has no international exposure versus XL Capital, XL Capital has business across the world and is far more likely to have exposure to the risks associated with the earthquake and tsunami."

The Royal Gazette contacted XL Capital yesterday, but an XL spokesman was unable to comment at this stage.

Mr. Newsome said that the exposure will principally come in the form of property casualty insurance coverage for multi nationals who have businesses in the region, resorts and other larger corporations and firms doing business in the regions. But in his best judgement he estimates the final claims will be small relative to a region like Florida simply because there is such light use of insurance.

"The primary coverage, the bulk of the coverage would be either with companies domestic to the region or spread out pretty evenly over the world," he said.

Others in the industry have already confirmed their losses from the disaster would be relatively small.

AIG, the world's largest insurance group, said this week it would "not have significant business exposure or losses" while Lloyd's of London said the exposure of its syndicates would be "limited to holiday resorts, personal accident, travel insurance and marine risk".

Swiss Re put its exposure at below $88.1 million and said this will not need to restate its forecasts for the year.

"The claims cost for the insurance industry will be in sharp contrast tot he human and economic losses triggered by this event as the insurance penetration in the coastal areas of the affected countries and the concentration of value is comparatively low.

"Most of the insured losses are likely to concern property damage and business interruption. ," Swiss re said in its December 30 statement.

Munich Re said economic losses would probably exceed $10 billion, but its own losses would be less than $136million.

The German-based company also said that it wasn't sufficiently exposed to warrant changing earnings forecasts for the current business year.

In a Press release issued on Tuesday Stegan Heyd, member of Munich Re's Board of Management said the Asian disaster and other weather extremes of 2004 are yet a further reminder of the global threat from natural catastrophes.

"They underline our long-standing demand for prompt and rigorous measures against global climate change. After the disappointing outcome of the recent climate summit in Buenos Aires, time is running out.

"We will continue to provide cover for losses from natural catastrophes if the price is commensurate with the risk that is highly exposed due to weather related phenomena and concentrations of values. The unprecedented claims burden from natural catastrophes has contributed to risk awareness and appreciation for insurance protection growing again. It has also led for the prices of these covers remaining stable in the renewal season that is now coming to an end."

Mr. Newsome expects that the disaster will have a pretty minimal impact on how people in the region view insurance in the future simply because events of this size and magnitude are pretty infrequent.

"Most of these countries have insurance industries that are so embryonic in their nature that even if customers wanted to make significant increases in their purchase of insurance they probably can't," Mr. Newsome said adding that the disaster is not a principal area where insurance would provide coverage because it is too big. "Disasters in this magnitude in many respects are not insurable. They are too infrequent and the losses are too large so they end up being essentially covered by the government just like we have flood insurance, large terrorist events and nuclear biological event."

Fitch Ratings said earlier this week that because the earthquake and resultant tsunami occurred in the December, the fourth quarter earnings of Asian primary insurers and reinsurers world-wide will be affected. However, the event occurred too late to affect January 1 reinsurance renewal pricing. Fitch said however that retrocessional reinsurance pricing could be affected and many retroceesional policies renew on March 1.