Chile quake runs up $7b insurance bill

Reinsurance giant Swiss Re yesterday estimated insurers will have to pay up to $7 billion for damages arising from the deadly earthquake in Chile.

"This latest earthquake will lead to significant insurance claims for property damage and business interruption which are designed to facilitate a swift economic recovery," said the Zurich-based reinsurer, noting that most Chileans take out insurance policies for their properties.

"Swiss Re's preliminary estimates suggest the total insured loss for the insurance industry for the earthquake in Chile will be in the range of $4 billion to $7 billion," it added.

The reinsurer itself expects to pay up to $500 million for claims over the earthquake.

Meanwhile, Swiss Re said it also expected to pay another $100 million in claims for the winter storm Xynthia which swept across western Europe late last month, leaving 62 people dead.

Germany's Munich Re, the world's biggest reinsurer, also estimated total insurance claims from the 8.8-magnitude quake that hit Chile on February 27, killing close to 500 people, at $4 billion to $7 billion.

The German group said it expected claims against Munich Re of around €500 million.