Swiss Re expects Katrina claims to match Andrew

Reinsurer Swiss Re expects insurance claims from hurricane Katrina to match those from hurricane Andrew in 1992, the largest insured catastrophe in the last 35 years, a company executive said yesterday.

Katrina, which lashed the US Gulf of Mexico coastline on Monday, pummelling the historic jazz city of New Orleans with 100 mph (160 kph) winds and swamping resort towns, has claimed at least 50 lives so far, but that number could rise as rescue teams forge into the region after the disastrous storm.

"Katrina is in a range comparable to Andrew, cost-wise," David Bresch, the head of Swiss Re's Atmospheric Perils Group, said at an industry conference in Copenhagen. "But it will take another couple of days before we have an estimate, as the flooding is still going on."

Katrina could cost insurers up to $26 billion, which would make it the most expensive storm in US history, industry analysts have said.

But Munich Re, the world's largest reinsurer, said on Monday it estimated the overall insurance industry bill from Katrina to be $15-20 billion, of which it stood to pay €400 million, before taxes and before the amount that it can pass on to other reinsurers.

Andrew, which wreaked havoc in southern Florida in August 1992, caused a $20.9 billion hit to insurers, even more than the cost of the World Trade Centre attacks in 2001.

Mr Bresch said Swiss Re has a market share in the United States of five to seven per cent, and that eventual claims would be mitigated by federal funds.