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Munich Re Bond Insures against More European Storms |
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| GERMANY: November 22, 2005 | ||
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FRANKFURT - Munich Re has issued a 110 million euro ($129 million) bond to cover losses in the event that global warming fuels a rise in storms in western Europe, the world's biggest reinsurer said on Monday.
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"You can see the impact of climate change when you look at what happened in the Atlantic," a spokesman told Reuters, referring to recent hurricanes. "You must reckon that storms in western Europe could also increase in frequency." Munich Re said that it had placed the bond to complement its existing risk-management measures including insuring itself against freak storm claim bills. The reinsurer -- it sells insurance that covers insurers in the event of a high claims bill -- said it was preparing for a potential repeat of storms such as Lothar and Martin that ripped through France, Switzerland and Germany in 1999. This year's hurricane season has spawned some of the most intense Atlantic storms on record: Katrina devastated New Orleans and parts of Mississippi and Alabama in August and killed an estimated 1,200, while Rita hit the Texas-Louisiana border a few weeks later. While one-off investment gains have kept Munich Re on course for its 2005 profit goal, rivals Swiss Re and Hannover Re have been forced to lower their sights because of heavy claims from the storms. Munich Re's 2005 result will be bolstered by a windfall gain from swapping its stake in HVB for shares in Italy's UniCredito , which is buying the German bank.
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REUTERS NEWS SERVICE
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