Insurance claims in the wake of Hurricane Katrina have already reached US$34.4bn, making it by far the most costly disaster in US history, according tothe industry's official statisticians.
The bill exceeds the US$21bn record held since 1992 by Hurricane Andrew and is likely to rise further, the Insurance Services Office
(ISO) said. The body will conduct another study in two months' time to include additional claims.
The estimate by the ISO centres on claims made for wind and storm damage to private and commercial property and to cars caused by Katrina. It does not include claims covering agriculture, aircraft or offshore drilling platforms or utilities. It also does not include flood damage, which is picked up by the government.
The insurance industry has estimated the final bill for Katrina could be up to US$60bn, with claims flowing not just to US insurers but also to those in Europe, including Lloyd's of London.
Most analysts believe insurers are now much better at spreading their risk, making it unlikely that the unprecedented claims will bring down any insurer on either side of the Atlantic.
But liabilities are nonetheless expected to be considerable. Munich Re has warned that profits would be hit by the disaster, and has tripled its expected loss from an initial 400m estimate.
Standard & Poor's, the credit rating agency, downgraded its reinsurance industry outlook to negative.
Wellington Underwriting, a Lloyd's insurer, yesterday raised its own estimated losses from the extraordinary storms to about US$125m before tax against its previous estimate of US$75m.
Brit Insurance, whose chief executive Dane Douetil recently forecast an industry loss of near US$50bn, said its strong balance sheet enabled it to continue with a strong dividend policy in spite of the "earnings fluctuation due to major insurance claims".
The ISO said the largest number of demands for insurance payouts have come in Louisiana, reflecting the devastation to the city of New Orleans, which was hit on 29 August.
Some 900,000 claims totalling US$22.6bn (two-thirds of the total cost) have been filed in the state. Mississippi was second with US$9.8bn and 490,000 claims; Alabama third with US$1.3bn and 123,000 claims.
The ISO's figures do not include damage caused by Hurricane Rita, which hit Texas two weeks ago.
- INDEPENDENT
