Estimates on the claims burdens from Hurricanes Gustav and Ike

2008/10/29

According to Munich Re's estimates, Hurricanes Gustav and Ike together gave rise to market losses of up to US$ 20bn. Munich Re puts the market loss caused by Gustav at up to US$ 5bn, and that caused by Ike at up to US$ 15bn.

The Munich Re Group estimates its own claims burden from the two hurricanes as follows: Overall burden in the region of US$ 500m net before tax, with around US$ 100m from Gustav and around US$ 400m from Ike.

Statement from Dr. Torsten Jeworrek, Board member with responsibility for Munich Re's global reinsurance business:

"Climate change will result in a further increase in weather-related natural catastrophes and also in the losses they cause. Events like Hurricanes Ike and Gustav fit in with this pattern, even if individual natural catastrophes cannot be explained by climate change alone. As a leading reinsurer, we are ready to deal with this: we have been concerning ourselves with climate change for decades, and after the record number of hurricanes and hurricane losses in 2004 and 2005, we adjusted our models to take account of the previously unexpected loss patterns."

"At the same time, events like the latest hurricanes endorse our insistence that risks be consistently written at adequate prices, despite years with comparatively low losses like 2006 and 2007. Along with the financial crisis, with its impact on the capital base of insurers, events like the recent hurricanes are contributing to a tightening of the reinsurance market and the advent of a phase of harder markets with rising prices."

 

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