PartnerRe Ltd. has predicted claims paid out from the damage caused by Hurricane Gustav totalling up to $45 million.

The company's preliminary estimate of claims relating to its exposure to Gustav is currently expected to be between $25 million and $45 million on a pre-tax basis, net of reinstatement premiums.

Meanwhile it also revealed a holding of $110 million face value of fixed income securities issued by Lehman Brothers Holdings Inc. (Lehman), which filed for bankruptcy protection on Monday.

This included $82 million in senior notes and $28 million in subordinated notes issued by Lehman and represents less than one percent of PartnerRe's total investment portfolio.

PartnerRe has no direct ownership of Lehman common stock, and has De minimis exposure through its participation in Standard & Poor's 500 indexed exchange-traded funds.

But a spokesperson for PartnerRe said the company would be able to absorb the exposure of $110 million, with a well-diversified portfolio and little credit risk.

"During the last week of August, 2008, Hurricane Gustav intensified from tropical storm status to a Category 3 hurricane as it moved across the Caribbean — Hispaniola, Jamaica, and Cuba — and the Gulf of Mexico before making landfall in the US on September 1, 2008 about 70 miles west of New Orleans, Louisiana," the bulletin PartnerRe released on Thursday noted. "At landfall in the US, Gustav was a strong Category 2 hurricane."

"PartnerRe's loss estimate is based on the assessment of individual treaties as well as client data and is spread across the US, global (non-US) specialty and catastrophe sub-segments.

"This loss estimate will be refined as additional information is received from cedants."