German reinsurance giant Hannover Re has become the first reinsurance firm to warn that the cost of Hurricane Katrina will pull its profits lower.
More than 80% of New Orleans is under water
The firm said its full year net profit would reach "at least" the 2004 level of 309.1m euros ($386m; £211m).
That is 30% lower than its previous forecast of 430-470m euros - a target it has said is "extremely unlikely".
Hannover Re, like other reinsurers, acts to cover insurance firms against the cost of big claims.
It is the fourth biggest reinsurance group in the world.
Wide range of estimates
Many insurance and reinsurance firms have begun to quantify the extent of both the financial damage caused by the hurricane which swept through Mississippi and Louisiana earlier this week, and the extent of likely claims.
With the extent of the damage still unclear but growing more serious by the day, the estimates to date may well fall short of the final bill.
Munich Re, the largest reinsurer in the world, said on 30 August that it was expecting claims of up to 400m euros before tax - although some of that might be passed further down the chain to other reinsurance companies.
Overall, it said, the total insured loss could be $15bn-$30bn.
Swiss Re, the number two player in the market, puts the estimated overall insured loss at $20bn with its own claims totalling some $500m.
Hannover Re's own estimate for the total size of claims is $21bn - but the reinsurer said that the storm might actually improve some parts of its business in the coming year.
"We expect to see additional significant hardening of prices and conditions in natural catastrophe and marine reinsurance," the firm said in a statement, explaining that more people might realise the importance of such insurance.