Allianz raises terror claims

September 21, 2001 Posted: 1241 GMT

LONDON (CNN) -- Germany's Allianz became the latest insurer to increase its expected claims from last week's terrorist attacks on the U.S.

Insurance companies expect claims for the attacks on the World Trade Center could top more than $30 billion, while actuaries – the accountants to the insurance industry -- estimate costs could be as high as $100 billion

Allianz, Europe's second-biggest insurer, said on Friday its estimated losses could reach 1 billion ($930 million), up from an earlier forecast of 700 millon.

The Munich-based insurer lowered its profit forecast as a result of higher-than-expected claims from business interruption, aviation and property damage. Allianz lowered its forecast for 2001 net profit of about 1.7 billion from a previous estimate of 2 billion.

"This decline does not affect the financial solidity of the Allianz group," the company said. "For example, the estimated total loss mathematically translates to less than 3 for each Allianz share."

Allianz shares dropped 12.89, or 5.7 percent, to 205.11 in early trade, while Frankfurt's Xetra Dax benchmark index plunged 175.94 points, or 4.5 percent, to 3,636.73, its lowest point since October 1997.

Allianz spokesman Hubertus Kuelps told Reuters the attacks would force Allianz to raise premium rates -- passing on expected rate increases from reinsurers -- but not force a fundamental review of its busines strategy.

On Thursday, the world's two largest reinsurers Munich Re and Swiss Re doubled their estimates for the claims, saying they could pay up to $3.2 billion as they undertake a more detailed assessment of the disaster.

Munich Re, the world's biggest reinsurer, said the disaster was the biggest financial loss the company had suffered.

Warren Buffett's Berkshire Hathaway said it expected $2.2 billion in pretax losses from attack claims, the largest exposure acknowledged so far.

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