PartnerRe Ltd. expects to take a hit of up to $70 million as a result of last week's explosion of the Deepwater Horizon Drilling Platform in the Gulf of Mexico.

The Bermuda-based reinsurer said that while the ultimate insured loss for the event was unclear given the multiple parties involved and the on-going situation regarding the control of the oil spill, it estimates that insured losses from the explosion have the potential to exceed $1 billion.

The company added that, given current information, it expects its second quarter 2010 results will include claims relating to the explosion which caused the platform to sink approximately 50 miles southeast of Venice, Louisiana in the Macondo Prospect area, to be in the range of between $60 to $70 million.

These losses were expected to be contained mainly within the Global Specialty and Paris Re sub-segments.

The estimate, which is pre-tax, net of reinstatement premiums, assumed and ceded, and net of retrocession, is preliminary, given the significant uncertainty regarding liability exposure.