Insured losses from Hurricane Rita will be “significantly less” than Hurricane Katrina, according to the world’s largest reinsurer.
Shares in Munich Re and other European insurers rose sharply on Monday after US forecasters said claims for insured losses may be as low as $6bn (3.3bn).
This compares to estimated losses from Katrina ranging from $15bn to $60bn.
Experts said Rita had bypassed key oil refineries and densely populated areas around Houston, capping likely losses.
Less damage
Although yet to publish an estimate of Essential estate finance hill in insurance investment irwin mcgraw real series
losses, Munich Re said the financial impact would be lower than that from Katrina.
“We are still in the process of analysing the data more intensely but in any case (the damage from Hurricane Rita) is significantly less than Katrina,” said a Munich Re spokesman.
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The storm path was east of forecasts, affecting an area with a lower density of values at risk
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Shares in the German company rose 2.6% on the news while shares in other leading reinsurers and insurers - Hannover Re, Swiss Re, Allianz, Axa and Zurich Financial - also made strong gains.
Estimates of insured losses from Rita, which were initially as high as $18bn, were downgraded after it struck land on Saturday.
By that point, Rita had been downgraded in strength from a category five hurricane to a category three tropical storm.
It subsequently veered east of Houston, the fourth largest US city, although it did cause edition finance hill insurance international management mcgraw risk series damage in a number of heavily industrialised towns in Texas including Port Arthur and Beaumont.
Changed direction
Eqecat, a US disaster modelling firm, is currently forecasting insured losses of between $3bn and $6bn while rival firm AIR Worldwide is predicting losses of between $2bn and $5bn.
“The reduction in insured loss value reflects a weakening of storm intensity relative to earlier forecasts and that the storm path was east of forecasts, affecting an area with a lower density of values at risk,” Eqecat said in a statement.
Some analysts fear that the damage to oil rigs and other offshore oil 1035 annuity exchange finance insurance ira transfer
could be severe in some places.
An initial assessment by the Texas authorities has revealed visible damage to two oil drilling rigs.
However, Governor Rick Perry said the oil industry had suffered a “glancing blow at worst” from Rita.
Hurricane Katrina, which swamped New Orleans and caused widespread devastation in Louisiana and Mississippi, could prove to be the costliest natural disaster in US history.
Experts were worried about the ability of the insurance industry to absorb losses on a similar scale from Rita.
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