Reinsurer Swiss Re has more than doubled its estimate for claims it expects to pay from Hurricane Katrina to up to $1.2 billion (SFr1.5 billion).This content was published on September 12, 2005 - 13:12
The world's second-largest reinsurance company said total insured losses from last month's hurricane in the United States could reach $40 billion.
Swiss Re had previously agreed with the world's largest reinsurer, Munich Re, that the total losses would be $20 billion.
"Due to the unique nature of the event, the complexity and the magnitude of destruction caused, accurate claims estimates remain difficult," Zurich-based Swiss Re said in a statement on Monday.
As a result of more than doubling the estimate of the claims it may face, Swiss Re does not expect to meet its target of ten per cent growth in earnings per share this year.
However the company claimed its financial strength remained very strong and said it was confident it would grow further in the second half of the year.
Most costly hurricane
Swiss Re confirmed its plans to pay a dividend of SFr2.5 per share for 2005.
"We are witnessing increasing natural catastrophe events across the globe, affecting economies and societies with a higher frequency and severity. Price levels in the upcoming renewals must be adjusted to reflect these developments," Swiss Re chief executive John Coomber said.
Catastrophe modelling experts have raised their initial loss estimates to as much as $60 billion.
The revised estimates would make Katrina the most costly hurricane in history, ahead of Hurricane Andrew in 1992, when claims reached $22 billion, according to Swiss Re figures.
The statement comes just as the reinsurance sector holds its annual gathering in Monte Carlo, where reinsurers and their clients hold preliminary talks over next year's contract renewals.
swissinfo with agencies
Swiss Re estimates to pay $1.2 billion (SFr1.5 billion) for claims following Hurricane Katrina on the United States Gulf Coast last month.
The company said it remained difficult to give accurate claims because of the complexity and magnitude of the destruction wreaked by the hurricane.
Katrina first hit Florida as a category 1 hurricane on August 25.
Gaining in strength over the Gulf of Mexico, it hit Louisiana on August 29 as a category 4 hurricane.
It went on to cause devastation in Mississippi, Alabama and Tennessee.
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