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Katrina set to cost insurers over 11bn

The catastrophic effects of Hurricane Katrina is set to cost the insurance industry over 11bn, making it the second most costly hurricane in history.

The figure is only eclipsed by Hurricane Andrew in 1992, when insurance claims reached over 12bn, according to a Swiss Re prelimin- ary estimate.

The reinsurer expects its own claims to be around 277m although it says the complexity of the damage caused by storms and flooding means that estimates have a more than usual degree of uncertainty.

Its natural catastrophe claims for the year are now estimated at over 500m, including European storms in January, flooding in India and Central Europe this summer and July’s Hurricanes Dennis and Emily.

Around 80 per cent of New Orleans was left underwater after a mass evacuation of residents. It is reckoned that thousands of people have died in the city and throughout the region .

A Swiss Re spokesman says: “What distinguishes Katrina from other hurricanes is the complexity of the damage caused. The geography, the time that the city has spent underwater, offshore damage to oil sources, amount of business interruption and social damage all add to this complicated picture.”

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