Insurance Journal has posted a quick summary of the potential impact of Katrina on insurance. Here are excerpts.
Note that some of the insurers below are reinsurers, who provide insurance to primary insurers who want to protect themselves from excessive claims resulting from disasters like Katrina.
Insurance Journal –
* Vesta Insurance Group Inc. (VTA.N:) said on Sept. 1 it expects the preliminary gross loss from the first landfall of Hurricane Katrina to be in the range of $500,000 to $1.2 million.
* Alfa Corp. (ALFA.O:) said on Sept. 1 preliminary estimates indicate storm losses will be less than $125 million, with no impact on its third quarter earnings. EUROPE
* World’s largest reinsurer, Munich Re (MUVGn.DE:), said on Aug. 30 it may have claims of up to 400 million euros ($488 million), before taxes and before the amount the company can pass on to other reinsurers. It expects the overall insured loss to be $15 billion to $20 billion.
* The Lloyd’s of London insurance market said on Aug. 30 it expects to receive “significant insurance claims,” largely from offshore oil and gas platforms in the Gulf of Mexico, property damage and claims from businesses forced to close. It has asked all the insurers to supply claims estimates by Sept. 12.
* Hannover Re (HNRGn.DE:), the world’s fourth largest reinsurer, said on Aug. 31 it was “extremely unlikely” to hit its 430 million to 470 million euros profit target for 2005 as a result of claims from Katrina. It expects Katrina to be the most costly U.S. storm, topping Hurricane Andrew’s bill of about $21 billion.
* Swiss Re (RUKN.VX:), the world’s second largest reinsurer, said on Aug. 31 it expects claims of about $500 million. It forecast total insured losses of around $20 billion.
* Paris-based reinsurer Scor (SCOR.PA:) said on Sept. 1 Katrina may cost it 25 million to 35 million euros.
* Converium (CHRN.S:), the Zurich-based reinsurance company, said on Sept. 1 it saw claims from the hurricane of between $10 million and $20 million. It put the total bill to the industry as a whole at around $25 billion.
($1=.8197 Euro)
Note that these statements were from yesterday and the days before – the latest news out of New Orleans, Mississippi, Alabama, and other areas indicates that losses from looting, flooding, fires, and other causes may significantly increase total claims. In addition, follow on problems such as hospitals losing electricity, generators failing, and emergency services problems may add to the loss of life and thereby increase claims.
Note – I’m trying to keep this objective and dispassionate. That is incredibly difficult. This is not merely a financial disaster, it is a human tragedy on so many levels. Do not misinterpret the tone of these posts as one that implies lack of concern or awareness of the human impact of Katrina. Thanks.
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