events this year, an insurance executive said this week.

Exel Ltd. senior vice president Gavin Arton noted that while none of the Bermuda companies will face severe losses as a result, third quarter losses could be one of the top claims-producing quarters for the reinsurers since their formation earlier this decade.

Exel is the parent to XL Mid Ocean Re, the recently created reinsurance entity that emerged from Exel's acquisition of Mid Ocean Re and Global Capital Re.

Mr. Arton said, "This (third quarter events) might cause a charge with respect to earnings, but it certainly won't change the fortunes of these companies.

"I'd be surprised if any were without any losses from these events. The short term pain may in some cases be significant, but the longer term materiality relative to corporate results would be modest.'' He was commenting after estimates that primary insurers were expecting to take a major hit from recent catastrophes, especially in a period when insurers sought to retain more of the risks they would normally cede to reinsurers.

The US property/casualty insurance industry is expected to pay homeowners and businesses $3.66 billion for this year's third-quarter catastrophe losses, compared with $510 million for the quarter a year ago, according to Insurance Services Office, Inc.'s (ISO) Property Claim Services (PCS) unit.

The word in the industry is that at least a couple of US domestic insurers may be fatally wounded as a result.

Combined with the $4.6-billion payments to policyholders for property damage in the first half of this year, the industry's catastrophe losses for the first nine months of the year total $8.3 billion, compared with $2.35 billion a year ago.

This year's third-quarter catastrophe losses were the third worst third-quarter losses in history.

Surpassing this year's third-quarter losses were the $17.4 billion losses in third-quarter 1992, largely from Hurricanes Andrew and Iniki, and the $4.4 billion losses in third-quarter 1989, largely from Hurricanes Hugo and Chantal. Insurers' catastrophe losses so far this year are more than three times greater than the total of $2.6 billion for all of last year.

More than two-thirds of this quarter's $3.66-billion catastrophe losses were racked up by Hurricane Georges, when it caused $2.5 billion in insured property damage in Puerto Rico, the US Virgin Islands and four Gulf Coast states.

The nearly 1.2 million claims from eight catastrophic events is a record for any third quarter.

ISO's PCS unit defines a catastrophe as an event that causes $25 million or more in insured property losses and affects a significant number of property and casualty policyholders and insurers.

The PCS estimate represents anticipated insured loss on an industry-wide basis arising from the catastrophe, reflecting the total net insurance payment for personal and commercial property lines of insurance covering fixed property, personal property, vehicles, boats, related property items, business interruption and additional living expenses. The estimates exclude loss-adjustment expenses.

GAVIN ARTON -- The third quarter "might cause changes with respect to earnings, but it certainly won't change the fortunes of these companies.''