Risk Management Solutions has increased its estimate for US insured losses from Hurricane Wilma from $8 billion to $12 billion. The announcement comes as one of the world's largest reinsurers, Swiss Re, has revealed that hurricane costs will make it miss its financial targets for the year.
Risk Management Solutions (RMS), an international provider of products and services for the management of catastrophe risk, increased its estimate to $12 billion from its original estimate of $6 to $10 billion. RMS’s evaluation includes the cost of onshore damage resulting from wind and coastal storm surge, business interruption, and increased costs for materials and services needed for repairs (demand surge).
The revised figure for insured losses resulting from Wilma include further analysis of the wind speeds in the Miami metropolitan area and along the eastern coastline, which Wilma crossed as a large, category two hurricane.
Meanwhile, Swiss Re will not achieve its target of 10% earnings per share growth for 2005. The revelation comes as the reinsurance provider reported hurricanes Rita and Wilma will cost it $750 million, which when added to its costs for Katrina takes Swiss Re total exposure for the three major American storms to nearly $2 billion.
However, the company said it will use equalization reserves to mitigate part of the claims resulting from the hurricane season to ensure its dividend guidance for 2005 of CHF2.50 per share remains unchanged.