Swiss Re anticipates $40-billion Katrina loss

Swiss Re now expects the total insured loss from Hurricane Katrina for the insurance industry to be in the range of US $40 billion. Swiss Re estimates its own claims to be in the range of US $1.2 billion. Originally Swiss Re estimated a loss of US $500 million for Hurricane Katrina, on the basis of an estimated market loss of US $20 billion.Although the company’s financial growth earnings will likely not be met for 2005, Swiss Re does expect to use part of its equalisation reserves, built to help mitigate large claim events such as Katrina. The company says its financial strength remains very strong and is expected to grow further in the second half of the year. Swiss Re’s board affirmed its recommendation of a dividend of CHF 2.50 per share for the business year 2005, assuming normal business development for the remainder of the year. John Coomber, Swiss Re CEO, says: “We are witnessing increasing natural catastrophe events across the globe, effecting economies and societies with a higher frequency and severity. Price levels in the upcoming renewals must be adjusted to reflect these developments.”