Forward-looking statements contained in this call are based on the company's assumptions and expectations concerning future events and financial performance of the company and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Such statements are subject to significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements.PartnerRe's forward-looking statements could be affected by numerous foreseeable and unforeseeable events and developments, such as exposure to catastrophe or other large property and casualty losses, adequacy of reserves, risks associated with implementing business strategies, levels and pricing of new and renewal business achieved, credit, interest, currency and other risks associated with the company's investment portfolio, changes in accounting policies and other factors identified in the company's filings with the Securities and Exchange Commission. In light of the significant uncertainties inherent in the forward-looking information contained herein, listeners are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the dates on which they are made. The company disclaims any obligation to publicly update or revise any forward-looking information or statements. In addition, during the call, management will refer to some non-GAAP measures when talking about the company's performance. You can find a reconciliation of these measures to GAAP measures in the company's financial supplement. With that, I'll hand the call over to Costas. Costas Miranthis Thank you, Robin and welcome everybody to our fourth quarter results call. As we already preannounced, we had a disappointing fourth quarter. An operating loss of about a $138 million is clearly not a result we like to see too often. Once again the focus is on catastrophe losses. The main catastrophe event during the quarter was the flooding in Thailand. This is the most severe flooding in that country for at least the last 50 years and we estimate that ultimately insured losses may exceed $15 billion and will impact a number of lines of business.
Our loss estimate from this event, over $120 million is consistent with our participation in the region and our position as a major multi-line international reinsurer. In addition during the fourth quarter we set aside additional reserves to provide for potential adverse development on the catastrophe events that occurred earlier in the year particularly the earthquake losses.Due to the number of losses during the year as well as the conflicts nature of the loss settlement process, we decided to send our own claim teams to the affected regions to perform claim audits and get firsthand experience on the claim situation. Earthquakes present unique settlement issues. As a result of these audits which were completed in November and early December, we decided to modify our estimates in a number of cases. I would note that in most cases, this was not the result of residents revising their own estimates, but rather the result of us taking a different view from this as a result of our own audits. In addition given a number of catastrophes during the year as well as the continuing uncertainties around the settlement process, we established an additional overall reserve of around $50 million that will be available to absorb further development if any loss occurs. As far as the catastrophe activity, we experienced a slightly elevated number of mid-size losses during the quarter for example in energy, engineering and so on. The losses however remain within the boundaries of our normal volatility that we experience at every quarter. So overall the catastrophe losses we experienced during 2011 make this a challenging year for the industry as well as PartnerRe. It was also a rather unusual year and that for reinsurers, the vast majority of the catastrophe activity occurred outside the US. Being an international multi-line reinsurer, we had significant exposures in the areas where catastrophes happened during 2011. We recorded a significant operating loss for the year. A strong capital base allowed us to absorb these losses and our total capital currently standing in excess of $7 billion remains very strong. Read the rest of this transcript for free on seekingalpha.com