 The financial costs of hurricanes Katrina and Rita are mounting |
Munich Re, the world's biggest reinsurance firm, faces a bill for 650m euros ($782m; �443m) in the wake of hurricanes Katrina and Rita in the US. The German company said that just dealing with Hurricane Katrina, which swept across the US Gulf Coast a month ago, would cost it about 500m euros.
Munich Re said it would now be able to hit its 2005 earnings target only by selling its stake in German bank HVB.
The reinsurer owns 18% of HVB, which is being bought by Italy's UniCredito.
Widespread destruction
Munich Re estimated that Hurricane Katrina would result in an overall market loss of up to $30bn.
The storm caused widespread destruction in southern US states, flooding the city of New Orleans and bringing most oil production in the region to a halt.
Munich Re said it expected costs relating to Hurricane Rita, the weaker of the two storms, to be about 150m euros.
Reinsurers are the last port of call in the insurance business, underwriting the risks assumed by insurance companies on behalf of their clients.
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