Arch Capital has announced that it expects its 2005 third quarter net operating earnings to be hit with a $173m loss due to Hurricane Katrina.

The new figure by far exceeds the company's previous maximum probable loss estimate, which was in the range of $110m to $160m.

The Bermudan reinsurer also quoted further hits of $48m for Hurricane Rita, an additional $18m for hurricanes Dennis and Emily, and $13m for the European summer floods.

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