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Strategies & Market Trends : Value Investing -- Ignore unavailable to you. Want to Upgrade?

To: Spekulatius who wrote (42130)	4/2/2011 5:43:51 PM
From: Jurgis Bekepuris	Respond to of 78729

IMHO FSR's estimate is a WAG. However, they are partially right: if they provide reinsurance, their losses will depend on how much the companies they reinsured lose. So if these companies provide estimate of 25B-35B, FSR kinda needs to base its estimate on that number. They could say, "our clients are idiots and their real costs will be XX-YY billion", but this would be very bad PR. If FSR undererestimates, it would be accused to not listening to their clients. If they overestimate, the clients might be unhappy that FSR is second-guessing their estimates. Now they are kinda safe: "our clients estimated 25B-35B, if they were right, our estimate would have been right too". That being said, it is unclear if FSR is a great deal even with current estimates. I lightened on my position during current bounceback. I am not planning to buy more and might exit the position if price bounces up on no news. Disclaimer: I am not an insurance and reinsurance expert. I would be happy to hear comments of any insurance or reinsurance experts on FSRs press release and overall loss estimation process.