Munich Re, the biggest reinsurer in the world, estimated today that potential claims arising from the devastating terrorist attacks in the US last week could be as high as 2.1 billion euros.
The pre-tax figure - twice the amount Munich Re had originally been expecting - would represent around 11.5% of the group's gross premium income in its reinsurance business last year, which amounted to 18.3 billion euros, it said.
At the same time, Swiss Re, the world's second-biggest reinsurer, said in Zurich it expected nearly twice the volume of claims connected with the US attacks than it had previously anticipated. Swiss Re said it expected to foot a claims bill of some two billion Swiss francs (1.38 billion euros) instead of the 1.2 billion Swiss francs it forecast earlier.
Munich Re said: 'Based on the information currently available and taking in account conceivable loss scenarios, we estimate a possible pre-tax loss burden at 2.1 billion euros.' In absolute terms, the figure would constitute 'by far the largest loss in the history of Munich Re.'
But in relative terms - in relation to premium income - 'the claims burden is still marginally less than that following the San Francisco earthquake in 1906,' the German group said in a statement.
Munich Re had not yet received any claim from the primary insurers affected, but the information gathered so far changes the picture previously communicated, it explained.
Besides the twin towers of the World Trade Center, a number of adjacent buildings had also been damaged or destroyed. 'This will also have an impact on the level of business interruption claims. For these reasons alone, the extent of the overall loss is much greater,' Munich Re said. The company warned that in view of the complexity of the loss occurrence, it could take a long time to settle claims.
In the aftermath of the attacks, Munich Re said it would undertake a fundamental reassessment of the risk situation when resinurance policies came up for renewal in the last quarter of the year, as the attacks have revealed a previously unimaginable risk potential.
