Munich Re sees Thai flood claims of $670M

FRANKFURT, Germany (Reuters)—Munich Reinsurance Co., the world's biggest reinsurer, expects claims from Thai floods of about €500 million ($670 million) before tax, it said on Thursday, adding the final tally will only emerge once the waters have fully receded.

The German group also affirmed its outlook, saying it was still aiming for a 2011 profit and a flat dividend.

Insurers have been bracing for claims from floods in Thailand, which hit suppliers to companies like Toyota, adding to an already stiff disaster bill for this year that includes the earthquake and tsunami in Japan.

"The economic losses are huge, since key industries are concentrated in the region north of the capital, Bangkok, and its environs," Munich Re said in a statement.

"The consequences of the floods clearly show that prevention measures need to be strengthened in view of the country's high natural catastrophe exposure."

Peer Swiss Re Ltd. said on Tuesday it estimated the cost of claims from the floods at $600 million.

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.

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.

"Thailand is a wake-up call," Munich Re board member Torsten Jeworrek said in the statement.

"In emerging countries of growing significance to the interconnected global economy, the provisions made for and adaptation to such natural hazards need to be improved in order to contain the losses," Munich Re said.