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A woman walks past some furniture and other belongings she could salvage
A woman walks past some furniture and other belongings she could salvage, after Puerto Rico was hit by Hurricane Maria last month Photograph: Alvin Baez/Reuters
A woman walks past some furniture and other belongings she could salvage, after Puerto Rico was hit by Hurricane Maria last month Photograph: Alvin Baez/Reuters

Hurricanes and earthquakes will cost insurance industry £72bn

This article is more than 6 years old

2017 will be one of the worst years for insurance claims for natural disasters, says Hiscox, as reinsurance firm Swiss Re says its bill will be around £2.7bn

Hurricanes Harvey, Irma and Maria, along with two recent earthquakes in Mexico, will cost the insurance industry $95bn (£72bn), according to estimates released on Friday.

Swiss Re, one of the world’s biggest reinsurance companies, made the estimate as it admitted its own bill for the natural disasters would be around $3.6bn.

Reinsurance companies such as Swiss Re stand behind insurance companies and help to cushion the blow of claims from their customers.

Swiss Re warned that the “estimates are subject to a higher than usual degree of uncertainty” and could need to be adjusted as claims come in.

Christian Mumenthaler, Swiss Re’s chief executive, said: “The most recent natural catastrophes have been extremely powerful and we extend our sympathies to all those affected by these events.”

Hurricane Harvey made landfall in Texas in August, causing flood damage and leading to more than 80 people being reported killed in the state. Hurricane Irma caused devastation across the Caribbean in September before hitting Florida and Hurricane Maria tore through Puerto Rico.

Earthquakes hit Mexico last month, one of which was the most powerful the country had suffered in 32 years and killed at least 90 people.

Swiss Re did not provide information about the bill it faced for payouts caused by damage from the hurricanes but put the cost of Mexican quakes at $175m, indicating the bulk of its costs were caused by the hurricanes.

Other estimates have been made for the cost of the hurricanes. Hiscox, an insurer on the Lloyd’s of London insurance market, has put the cost of the insured damage of Harvey and Irma at $50bn. At the time Bronek Masojada, chief executive of Hiscox, said the claims would make 2017 one of the worst years for natural disasters.

But he indicated that the cost to the insurance industry would be reduced by the fact that only one in six Houston homeowners were covered.

The economic cost – which includes damage which is not covered by insurance policies – has been estimated at $300bn.

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