German-headquarter global insurance provider Allianz Group has estimated that its claims payout costs for the recent natural disasters in southern US and Germany will be half a billion euros.
According to Andreas Shell, who heads the global Allianz Group Crisis Claims Team, the recent extensive floods in southern Germany, Austria and Switzerland will cost the company E30 million. Meanwhile, Hurricane Katrina, which devastated large parts of Louisiana, Mississippi and Alabama, will cost the insurer in the region of E470 million.
However, Mr Shell added that Allianz was confident that it could handle the impact of the combined E500 million exposure without any serious consequences for its profit targets of E4 billion for 2005.
With regard to the impact of Katrina, Allianz said it expects claims for personal lines property insurance, such as home, building, or car owner’s policies. For commercial and industrial insurance, the most significant exposure appears to be in New Orleans, Louisiana as well as Gulfport and Biloxi, Mississippi. Multiple industries are impacted including energy, tourism, the financial industry and manufacturing, particularly petrochemicals.
However, even though Katrina has resulted in a great human tragedy, the company does not expect much exposure for life and health insurance.
Overall, the insurer predicts that the two major events will add about 1.2 percentage points to the full year combined ratio in its property and casualty insurance division, which it still hopes will come in below 95%.