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Insurers could face $15 billion bill after US attacks

Swiss Re is one of the Swiss insurers with the largest exposure to losses arising from the attacks on the US

(Keystone)

Insurance companies across the world are bracing for what could be the most expensive manmade disaster in history, as they await claims from the destruction of New York's World Trade Center.

Insurers could pay out between $10 billion to $15 billion (SFr16.6-24.9 billion), credit ratings agency Moody's Investors Services said. That amount would be second only to the $20 billion bill from Hurricane Andrew in 1992. But leading insurers and analysts said it was still too soon to tally the losses.

"It is far too early to estimate their magnitude," Maurice Greenberg, chairman of American International Group, the world's largest insurer, said in a statement.

The lack of information on damage, which insurers shared which risks, and the unresolved issue of liability, make it impossible to tell how much the final bill might be, and who would share it.

"It will be many years before even a rough range can be established for the losses," said US-based Berkshire Hathaway, the insurance and investment group owned by billionaire investor Warren Buffett.

The only point of agreement was that many insurers across the world would be hit by losses, and it would take time to unravel complex insurance programmes.

However several major European insurers and reinsurers, including Munich Re, Swiss Re and Allianz have estimated their likely losses in hundreds of millions of dollars.

Swiss Re, the world's second biggest reinsurer, said initial estimates of its exposure were in the range of claims for the severe winter storms in Europe in 1999, which cost it around SFr1.2 billion ($722 million).

Lloyd's of London, the traditional global centre for sharing large international insurance risks, said estimates of the losses so soon after the event could only be deeply flawed.

"This tragedy has far-reaching implications for many types of insurance, aside from the appalling loss of life and the obvious property and aircraft damage. These are simply unquantifiable at present," said Lloyds chairman Saxon Riley.

Lloyd's said it would not give any aggregate loss estimate until it had more detailed information. A spokeswoman said no further statement was expected on Thursday.

swissinfo with agencies


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