Swiss diversified financial services company Zurich Financial Services Group has estimated that Hurricane Katrina may cost the company in the region of $600 million after tax in policy payouts.
Zurich said the figure includes reinsurance recoverables and reinsurance reinstatement premiums and is based on an estimated loss after reinsurance and before tax of $725 million. The corresponding charges for Katrina will be recorded in the third quarter.
The insurer qualified the estimates as preliminary due to the continued dependence on judgment calls because of the sheer scale of destruction in Alabama, Louisiana and Mississippi. Since claims adjusters were able only recently to access the areas affected by Katrina, the current estimate is based on a combination of analytical approaches as well as calculations including exposure models and actual loss appraisals.
The announcement from the Swiss insurance provider comes after other major insurers revealed higher estimates for their exposure. Munich Re estimated the storm may cost it up to $950 million, AIG has predicted costs of $1.1 billion and Zurich’s domestic rival Swiss Re said Katrina would cost it $1.2 billion.