| Swiss Re says Chile's earthquake may cost global insurance industry up to $7b |
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10/03/2010 18:17 (704 Day 00:02 minutes ago) | |||||
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The FINANCIAL -- Swiss Reinsurance Co. on March 10 announced that, based on current information, it provisionally estimates its loss arising from the earthquake in Chile to be USD 500 million. The total insured losses for the insurance sector for the earthquake in Chile are estimated to be in the range of USD 4.0 billion to USD 7.0 billion.
Swiss Re said it will take pretax losses of around $500 million from the Feb. 27 earthquake, though it added there are still significant uncertainties around the figure, according to Market Watch. It will also take a further $100 million of losses from European winter storm Xynthia, which hit the Continent over the same weekend and did most of its damage in Spain and France.
"In Chile, it is common practice for owners of mortgaged residential property, commercial and industrial property to buy earthquake insurance from local and global private insurance companies," Swiss Re said. "Accordingly, this latest earthquake will lead to significant insurance claims for property damage and business interruption which are designed to facilitate a swift economic recovery," it added, Market Watch reports.
Total economic losses from the disaster in Chile may reach more than $15 billion, Swiss Re estimated, according to Blomberg. Boston-based catastrophe-modeling firm AIR Worldwide said on March 1 that the quake may cost insurers more than $2 billion, with total economic losses that could exceed $15 billion. Another modeling firm, Eqecat Inc., estimated insured losses in the range of $3 billion to $8 billion in a March 1 statement.
Another reinsurance company, Germany's Munich Re , has also said how much it estimates it will have to pay out as a result of the Chilean earthquake - $543m, BBC reports.
The announcements came as Munich Re reported a sharp jump in fourth-quarter profit to 780 million euros from 110 million euros a year earlier, with gross premiums up 6.9% to 10.38 billion euros, in line with pre-announced figures, according to Market Watch. The reinsurer stuck to its target for a profit of more than 2 billion euros for 2010, compared to around 2.5 billion euros for 2009, when it didn't suffer any major losses from natural catastrophes.
Munich Re also said it expects losses of as much as 100 million euros tied to winter storm Xynthia, which hit western Europe on Feb. 28, Bloomberg reports. Xynthia, which swept through Portugal, Spain, France and Germany, may cost the insurance industry 1.5 billion euros to 2.5 billion euros, with as much as 500 million euros attributable to Germany, Munich Re estimated.
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