Warning over Hurricane Dean costs

Munich Re said damage to property and possessions from Dean, a category five hurricane which killed 20 people, would total between $1bn and $2bn.

Dean battered much of the Caribbean, leaving a trail of destruction in the Dominican Republic, Jamaica and Mexico.

Munich Re warned in 2005 of a "systematic change" in the degree of hurricane risk and its financial costs.

Rising costs

It said the scope of potential financial losses would have to be widened following the devastation caused by Hurricanes Katrina, Rita and Wilma.

Katrina itself cost the industry $50bn (£26.7bn)

2007 has been the first year on record when two Atlantic hurricanes have made landfall as category-five storms in a single season.

Hurricane Felix has killed four people in Nicaragua over the past couple of days, although it has since weakened into a category-one storm.

The hurricane season is expected to reach its peak on 10 September.

Munich Re said its own liabilities from Dean, which fell within existing risk models, were likely to amount to more than $50m, but this was unlikely to affect its full-year profit forecasts.

Its comments come a day after rival Hannover Re said Dean would results in "major claims".

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