Total market losses could be as much as $25 billion, the Zurich-based reinsurer said in an e-mailed statement today. The losses are net of retrocession, or reinsurance bought from other reinsurance companies, and before tax. The estimate may change as the company continues to assess its claims, Swiss Re said.
Hurricane Sandy, which made landfall in the U.S. on Oct. 29, caused a storm surge, resulting in extensive flooding and loss of life and property. Before it hit the U.S., Hurricane Sandy affected the Caribbean and the Bahamas.
The claims burden “is more than I expected,” said Christian Muschick, an analyst at Frankfurt-based Westend Brokers. “The question is if this will be general trend or company specific.”
Swiss Re dropped as much as 0.8 percent in Zurich. It fell 0.6 percent to 66.30 francs at 9:31 a.m., valuing the company at 24.6 billion Swiss francs ($26.5 billion). Munich Re, the world’s biggest reinsurer, declined 0.2 percent to 129.6 euros. Hannover Re (HNR1) lost 0.3 percent to 56.98 euros.
Previously, Oakland, California-based Eqecat Inc., a catastrophic risk modeler, estimated Sandy may result in insured losses of as much as $20 billion across the industry.
“The hurricane hit the densely populated Northeast coast of the U.S.,” Matthias Weber, Swiss Re’s chief underwriting officer, said in the statement. “This led to prolonged power outages, disruption to public transport and damage to other infrastructure that have made recovery efforts very difficult.”
The claims estimate is subject to a higher than usual degree of uncertainty and may need to be adjusted, he said.
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