Foreign Insurers Are Assessing Charley’s Impact

While any accurate figures of the economic cost of Hurricane Charley’s deadly passage through Florida will not be available for some time, it’s becoming clear that, although the storm was a major catastrophe for the insurance industry, it will have less of an economic impact on the world’s insurers and reinsurers than originally feared.

It won’t approach Andrew’s $22 million (in today’s dollars). RMS gave a preliminary estimate of around $5 billion (see IJ Aug.16). Munich Re put the insured losses at between $7 and $14 billion, and indicated that its own exposure would probably be “a low triple-digit euro sum,” according to a report from AFP. AIR Worldwide indicated losses would be in the $6 to $10 billion range.

Most of the world’s major insurers and reinsurers, including Lloyd’s, Swiss Re, Zurich, Converium, a number of Bermuda-based companies and others have yet to issue loss estimates, although they have indicated that they do expect to handle a significant number of claims.

While they’re assessing the losses, for the most part they have echoed A.M. Best’s assessment that the catastrophe will have a relatively small impact on any company’s bottom line (See lead article).