Reinsurance Firms Braced For Substantial Claims For Hurricane Damage

by Jason Gorringe, Tax-News.com, London

29 September 2004

Two of the world’s largest reinsurance firms, Munich Re and Swiss Re, are expected to pay out around $1.2 billion in claims related to the succession of hurricanes that have struck across the Caribbean and south eastern United States.

According to reports, Munich Re’s losses are expected to total some $615 million, whilst Swiss Re will shoulder costs of around $600 million.

These claims are likely to grow over the coming weeks with yet another Hurricane, Jeanne, striking the Bahamas and eastern Florida.

Meanwhile, the Nassau Guardian reports that The Bahamas’ largest property casualty insurer, Bahamas First General Insurance Company Ltd, already expects to pay claims of up to $250 million as a result of Hurricane Frances.

Other firms are also bracing themselves for heavy payouts, including RoyalStar Assurance and Summit Insurance which have estimated losses connected to Frances at $50 million and $85 million respectively, according to the Guardian.

With the total cost of insurance claims in the region running into tens of billions of dollars, a rise in reinsurance rates next year would seem a certainty.

Recommended