Munich Re, the world's largest risk insurer, has revealed that hurricanes Katrina and Rita could cost it as much as E800 million. Meanwhile, the US storm season still has two months to run.
Several weeks on from the devastating effects of hurricane Katrina, German insurer Munich Re has revised its estimated exposure to around the E650 million mark. Furthermore, initial estimates put the cost to the company of hurricane Rita, which impacted on the US mainland just days ago, at E150 million.
The predictions are at the higher end of Munich Re’s estimation bracket and are based on an industry wide exposure of E60 billion. According to a release from the major reinsurer, the best case scenario is an exposure of approximately E500 million for Katrina based on a total industry bill of E30 billion.
The company stressed that it was still too early to be exact and overall seasonal estimates cannot be firmly calculated as the traditional storm season in the region has still two months to play out.
Nikolaus von Bomhard, chairman of the board of management commented: The natural hazard events to date have cost substantially more than the amount anticipated for the first nine months of this year. We are nevertheless optimistic of achieving our result target of 12% return on equity… As usual, the proviso applies that in the remaining three months of the business year, there are no exceptional developments as regards major losses or on the capital market.