Attached is our report on the impact of last week's events on the reinsurance industry.  We are continuing to monitor revised claims estimates and other implications for the industry and will update you on any developments as soon as possible.

Highlights include:
Initial Estimates
?	A trend toward initial estimates growing over time as more information becomes available typically occurs, especially in times of complex and costly disasters.
The complexity of the insured coverage (multiple types, heavily syndicated, heavily layered and heavily reinsured) makes developing estimates on even the most straightforward exposures (e.g., commercial property) a huge challenge.  Other sources of exposure (e.g., business interruption and 3rd party liability) are nearly impossible to estimate accurately at this time.  
Insurers generally track their losses on a net basis, based in the presumption that all ceded reinsurance is collectible.  There will likely be disagreements between insurers and reinsurers about the extent of coverage.  It is also possible that some reinsurers will be unable to honor all their claims, leaving primary insurers to shoulder a heavier load.
Industry Implications 
Beyond the immediate impact of this disaster on insurers' direct costs, industry analysts also note a broader number of implications for the industry:
Continued flight to size and quality of insurance carrier, causing further consolidation of the industry.
Acceleration of price increases already underway within commercial insurance and reinsurance.  
Acceleration of restructuring at Lloyd's, a market that specializes in just the types of coverages (aviation, specialty commercial, catastrophe reinsurance) that will be hardest hit.  Some analysts put Lloyd's share at $1.5 billion or more, a heavy blow given that many Lloyd's syndicates have suffered significant losses in recent years.