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Reinsurers put cost of tsunami disaster at 10 billion euros

Reinsurers put cost of tsunami disaster at 10 billion euros
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The world’s largest reinsurer, Munich Re, has estimated that the quake and tsunami disaster in Asia has wreaked economic damage of more than 10-billion euros. Early estimates indicate that 0.7 percent could be shaved off Thailand’s economic growth, and in less developed areas such as the Maldives the catastrophe could cut back growth by 4 percent.

The 10-billion figure given by Munich re comes nowhere near the 30-billion euro paid out after Hurricane Andrew in 1992. The cost of Sunday’s tsunami will also be 13 times less than the cost of Japan’s Kobe earthquake, which killed some 5,000 in 1995. There are signs that payouts by European insurers may not be as high as many first thought. Reinsurer Swiss Re’s statement that its damages will be below 100 million Swiss francs abated concern that insurers would be hit again, in what has already been a record year for catastrophes. The International Monetary Fund, meanwhile, has cautioned that it is too early to say if the disaster will have an impact on the global economy. The IMF says Sri Lanka and Bangladesh are the only two affected nations with existing IMF loan programmes, which could be adjusted to help deal with the cost of the disaster.