Excerpt from The New York Times:
A risk management firm yesterday offered the first estimate of economic losses from Hurricane Katrina - $100 billion - and said that private insurance would probably cover less than a quarter of that. Federal money and charitable contributions may need to do the rest.
Saying the damage already appeared far greater than expected, Risk Management Solutions in Newark, Calif., said that insured losses would range from $20 billion to $35 billion, much higher than the firm's initial estimate of $10 billion to $25 billion.
The new figures suggest that Hurricane Katrina will cost the insurance industry more than any other natural disaster on record, unseating Hurricane Andrew in 1992, which cost $21 billion in 2004 dollars, according to the Insurance Information Institute, an industry group. Katrina's price tag may also overshadow the $23 billion in insured losses caused by four large hurricanes last year in South Florida.
But there is far more that commercial insurers will not absorb.