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ZURICH (Reuters)—Reinsurer Swiss Re Ltd. estimates the cost of claims from floods in Thailand at $600 million, it said Tuesday, adding to an already high disaster tally for the year after severe rains damaged industrial sites and disrupted production.
Insurers have been bracing for claims from floods in Thailand, which hit suppliers to companies like Toyota Motor Corp., adding to an already stiff disaster bill for this year that includes the earthquake and tsunami in Japan.
Catastrophes cost the insurance industry $70 billion in the first half of the year, Swiss Re estimated in September, one of the most expensive on record.
The Zurich-listed firm has incurred some $2.8 billion in natural catastrophe claims so far this year, chiefly from the Japanese and New Zealand earthquakes.
Although Swiss Re's estimate for the Thai floods exceeded some analysts' expectations, Vontobel analyst Stefan Schuermann said that could allow the firm to raise reinsurance prices.
Property/casualty is Swiss Re's biggest segment, and the Zurich-based reinsurer has said renewal prices were hardening, a boon to its bottom line.
"Given the high level of insured losses, this event should further add upward pressure to natural catastrophe rates, which were so far up 5% to 15% in 2011 and thus should be a longer-term positive," Mr. Schuermann said, adding he expected the firm still to post a fourth-quarter net profit.
The total insured flood loss for the industry would likely amount to $8 billion to $11 billion, Swiss Re said, adding that due to high water levels in some places the estimate was still subject to high uncertainty.
"In addition to the human cost, the impact of this flood on the Thai economy and the companies that operate there is likely to be significant and could last some time," Chief Underwriting Officer Brian Gray said.
"For weeks, factories were under several meters of water and have been unable to produce and supply key parts to global carmakers or digital and electrical goods manufacturers."
Thailand's factory output slumped in October, and late last month the central bank said economic growth would be weaker than expected due to the floods.
Swiss Re said its figure of $600 million included retrocession—reinsurance of a reinsurer—but not taxes.